Hong Kong's house prices expected to be flat in 2015

Night view of skyscrapers and high-rise buildings in Hong Kong, China, March 10, 2013. [Photo/IC]

HONG KONG - Hong Kong's house prices are expected to be flat in 2015 as compared to the 10 percent growth in 2014, Fitch Ratings said in a report released here on Thursday.

The macro-prudential measures will lead to a marked slowdown in price growth in Hong Kong this year, and the home prices are forecast to be flat versus an average gain of 15 percent over the previous decade, Fitch said.

The government's cooling measures should stabilize affordability at current levels, though home prices already are highly stretched relative to incomes, according to the report.

Fitch maintains that Hong Kong does risk a downturn, considering the combination of the stretched affordability, rising rates and the large involvement of speculative investments in the sector.

Moreover, the house prices are expected to moderate across the Asia-Pacific region this year, driven by government regulatory pressures, tightened affordability and gradual interest-rate rises, the report said.

A gradual increase in mortgage rates is expected in 2015 and 2016 in Australia, New Zealand, Hong Kong and Singapore, while governments and regulatory authorities are targeting soft landings for the housing market in New Zealand, Hong Kong and Singapore, Fitch said.

Fitch's "Global Housing and Mortgage Outlook" includes forecasts and comparative analysis of house prices, arrears and mortgage lending volumes for 22 countries and regions around the world including Australia, Japan, South Korea, and for the first time, China's Hong Kong, New Zealand and Singapore.