JP Morgan believes the risks to the HK property market are from further slowing of China's economy and the potential rise in unemployment.
The research house believes secondary property prices will drop 5-10% in 2015 while primary prices will stay firm thus turning the current discount to a small premium for primary over secondary prices. The favorable supply/demand dynamic is likely to cushion any significant pricing downside.
JPM said the story of limited office supply is expected to continue in 2015 in Central. It expects demand to spill over to the fringe Central area as vacancies in the core Central area fall further. However, it believes retail rents will face stronger headwinds in 2015 with the potential slowdown in domestic consumption and tourist spending.
JPM expects office rents to increase 5-10% and retail rents to stay flat in 2015.
30/10/2014 15:37
[I-bank focus]HK 2015 home prices to decline 5-10% - JPM
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