Goldman Sachs Expects Hong Kong House Prices to Fall by 20% by 2025

Goldman Sachs expects Hong Kong house prices to fall by 20% by 2025 as the economy deteriorates and interest rates rise.

According to foreign reports, Goldman Sachs Group said that due to the deterioration of the economy and rising interest rates, housing prices in Hong Kong will fall by about 20% in the next four years. Goldman analysts including Gurpreet Singh Sahi said in a note dated March 28 that residential property prices will fall by 5% annually from 2022 to 2025. Previously, Goldman Sachs forecast house prices to be flat this year before falling 5% in 2023 and 2024 before stabilizing again the following year.

The Goldman Sachs report said Hong Kong’s battle against a fifth wave of the virus is hitting the financial hub and will cause the economy to contract in the first quarter.

Goldman Sachs said social distancing rules, coupled with rising unemployment and rising borrowing costs, will dampen demand, which will be reflected in lower house prices. Mortgage rates are currently around 1.5%, and Goldman Sachs expects it to be closer to 4% by 2024.

Moreover, Hong Kong‘s home prices have been falling steadily over the past few months, according to Centaline Property. Since the start of the year, house prices have fallen more than 3 per cent to their lowest level in 12 months.

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Goldman Sachs expects Hong Kong house prices to fall by 20% by 2025 as the economy deteriorates and interest rates rise.

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