Banks Forecast Strong Declines in Hong Kong Property

Home prices in Hong Kong, one of the world’s most expensive property markets, could see double-digit declines next year, forecasts from major banks show.

Prices are expected to drop 15 percent in 2015 on the back of an increase in unemployment, “a rising interest rate environment [in the U.S.] and competitive pricing by developers,” Credit Suisse said in a report this week.

The bank expects the Federal Reserve to increase borrowing costs by a quarter-point in the second quarter of next year followed by another half point in the second half, boosting mortgage rates in Hong Kong, which effectively imports interest rate policy from the U.S. through its currency peg. This could dissuade buyers from the property market.

CNBC

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.