Hong Kong house prices to fall by 30% by 2017

The price of buying a home in Hong Kong could fall by 30 percent between now and 2017, according to forecasts.

Quick, cut down on bubble tea and start saving for the property bubble to burst!

Eva Lee of market leader USB says buying demand will be hurt by lower inflation, rising unemployment rates and a deteriorating economy. Something to look forward to then.

“Unlike past down cycles that were triggered by global economic shocks, we believe this round of price reversals will be triggered by a deteriorating local economy. Thus, we think price drops may come more gradually and over multiple years,” Lee said in a briefing, according to the SCMP.

Home prices have jumped 340 percent since Hong Kong was in the grip of the SARS epidemic in 2003. This quarter, however, the Hang Seng Properties Index fell 15 percent, with property stocks declining an average of 20 percent over the past four months.

Lee also notes that 42 percent of Hong Kong’s retail sales were contributed by tourists last year.

“It is the highest level we have ever seen in the world and it is an unhealthy market. Hong Kong will get hit immediately once the number of tourist arrivals falls,” she said.

While that may be bad news for the economy, it’s also good news for renters, who could see residential rents falling 10 percent and luxury retail rents by 25 percent over the same period.

Can you see your landlord actually putting your rent down though? Nah, us neither.