Despite the uncertainty created from the ongoing protests, Hong Kong’s residential market continues to hold steady with transaction volume rebounding in final months of 2019; November transaction volumes rebounded 43.9% MoM to 5,756 units.

Our thoughts: The rebound in transaction volume was led mainly by a relaxation in mortgage rules for first-time home buyers which allowed for higher LTVs at a higher price cap, low interest rates and mortgage rate cuts from the city’s biggest lenders. Prices have also remained relatively stable as developers, who are mostly lowly geared currently, have been under no pressure to slash prices to move inventory. Nonetheless, against the onset of a weaker economy and continued social unrest, prices are expected to contract 5-10% in 2020 for the wider residential market.