The heyday of Hong Kong real estate could be coming to an end as buyer demand bottoms out amid a struggling economy and lower inflation. The South China Morning Post reports on recent findings by global bank UBS that forecast anticipate home price declines of as much as 30% in the Chinese city by 2017. “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,” Eva Lee, executive director and Head of Hong Kong/China Property Research at UBS, said. Hong Kong home prices have jumped 340 per cent since 2003 when the city was in the grip of the Sars outbreak.
Other factors contributing to the declines are rising unemployment rates and an expected drop off in tourism from mainland China, as the effects of economic turmoil spread across the nation. [South China Morning Post]