RICS Global RE Weekly: Hong Kong Housing Market Beginning to Cool Down

HONG KONG, June 18 /PRNewswire-Asia/ -- The latest update on the Hong Kong residential mortgage market is due towards the end of next week as the Hong Kong Monetary Authority (HKMA) releases its Residential Mortgage Survey results for May. The previous survey results for April showed that the number of loans approved declined in the month by 2.3% to 15,907.

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This seems to be consistent with the latest business surveys such as the PMI index which whist still signaling expansion, fell to its lowest reading in eight months. This suggests the pace of economic activity in Hong Kong is starting to slow. RICS expects the slowing trend in the economy will continue to weigh down on housing market activity in the near term.

New UK government to set out the extent of the forthcoming fiscal squeeze

The spending and revenue numbers will be changed next week as the government seeks to take a more aggressive stance to scaling back the shortfall in the budget. Critically, as the chart shows, financial markets appear reasonably content with the rhetoric and early actions of the new government.

US housing market losing momentum after tax credits end

Indeed, May data for housing starts already shows the hangover from these policy inducements, with housing starts down 10% m/m. This drastic decline in housing starts does suggest that the recovery in the housing market has lost some momentum, but RICS believes a renewed downturn is unlikely.

Cautious outlook for French construction sector

Shifting the focus back to the French construction sector, RICS expects that confidence will continue to recover on the back of stronger economic activity. However, the low level of capacity utilisation is likely to hinder the jobs outlook within the sector during the course of the year.

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