Housing Prices are Dropping, But a Nosedive is Unlikely

銀行加息樓價回調 跳崖式下跌可避免

Squarefoot - - CONTENTS - Eric Lee李峻銘Chairman and Chief Executive Officer Century 21 Goodwin Property Consultants主席及行政總裁 - 世紀21奇豐物業顧問行

銀行加息樓價回調 跳崖式下跌可避免

Hong Kong banks are finally raising interest rates for the first time in 12 years, marking the start of the new rate hike cycle. Large commercial banks, led by HSBC, have raised their prime rate by 12.5 basis points. In the case of a second-hand home bought at HK$7 million with the loan-to-value ratio set at 0.6, if the HK$4.2 million mortgage has a repayment period of 25 years, then the monthly mortgage payment will only increase by HK$260. Judging from this figure, the rate hike's effect seems small but let's not forget that Hibor-based mortgage rates, which had been standing at just above 1% from the beginning of 2018, are now mostly at 2.15% to 2.25%, approaching the rate cap, thanks to the HIBOR increase. Mortgage owners are starting to feel the pressure.

Due to a combination of factors—including the Us-china trade war, economic instabilities, stock market downturn, the new vacancy tax, increased discount in the Home Ownership Scheme and lower selling prices set by Chinese developers for new projects—housing prices in Hong Kong will experience a decline this year. The extent of the decline will depend on the moving trajectory of interest rates.

US interest rates have risen by 2% since 2015, through a total of eight rate hikes. The US Federal Reserve estimated one additional rate hike in 2018, three in 2019, and another one in 2020. The five upcoming rate increases are collectively expected to raise interest rates by another 1.25%. It would take a staggering 3% increase if Hong Kong were to catch up with the US rates, which would be bad news for the city's housing market. However, despite the interest arbitrage activities, the Hong Kong market is still well funded. Some think that most of the funds that have stayed in Hong Kong are from mainland China, and the flow of these type of funds is dictated largely by mainland policies rather than arbitrage strategies. With Hong Kong a major destination for outflowing mainland funds, it has become the norm for such funds to stay in Hong Kong for the long term. In addition, as the current Hong Kong rate hike is far below the 25-basis-point increase of its US counterpart, optimists tend to believe that Hong Kong interest rates will stay below the States' instead of trying to keep up.

On the other hand, it's unclear if the US Fed will actually fulfill its rate hike plans in the coming years, and the development of the Us-china trade war is a huge contributor to this uncertainty. If the trade war continues to escalate, its impact on the American economy and commodity prices will probably be felt starting next year. In the case of an economic downturn, the roadmap for the Fed's current rate hike will surely change course.

Optimistically, I believe that the increase of Hong Kong's interest rates will not surpass 1% in the following year. As for the housing market, while a 10 to 15% downward adjustment is inevitable, a steep plunge in home prices will be very unlikely.

香港銀行終於在相隔12年來首次加息,意味著香港的加息周期正式開始。今次加息幅度以匯豐等大型銀行計,只有0.125厘,可謂相當克制。以目前二手成交價樓700萬元中位數計,借款60%,即420萬元,25年還款期,供款增加260元,單單這個數目,當然對樓價影響輕微,但大家不要忘記,自今年年初,香港的H按的實際利息只是一厘多,現在已隨同業拆息升而達到封頂位,大部份在2.15%-2.25%之間,負擔壓力開始加重。

結合近期中美貿易戰、經濟不明朗、股市下跌、一手空置稅、居屋減價、中資發展商低價開盤等等不利因素,今年樓價將會從高位回調,但回調幅度,便要視乎港息的走向。

其實,美國的加息始於2015年,已經連續加了8次息,合共兩厘。根據美國聯儲局預測,今年還會加息1次,2019年還有3次,2020年再加1次,合理估計可能會再加5次,合共1.25厘。香港如果追回與美國息差的話,利息需追加3厘以上,對已經在回調的樓市而言,可謂雪上加霜。但香港市場的資金仍然充裕,套息活動似乎未能使留港資金流走。市場有一種說法,這種留港資金,大部份來自國內,資金的流向,視乎國內的政策多於利息的套利,由於香港始終是國內的主要走資基地,資金長期留港是一種新常態,就好像今次加息,銀行都沒有跟足美息的0.25厘的加幅,樂觀者會傾向港息會長期低於美息,不會追加。

再者,美國是會真的能夠實現其加息藍圖?這也是未知之數,最大的不確定性,是中美貿易戰的發展。如果貿易戰不斷升級,對美國物價及經濟影響,將會在明年陸續浮現,一旦經濟出現危機,美國聯儲局的加息大計又會出現變數!

筆者傾向樂觀,港息在未來一年,加幅都會在1厘以下,樓市無可避免出現1015%調整,但冀望出現跳崖式下跌,機會很細。

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