12 January 2018

Survey Finding on Views about Property Prices in Hong Kong Released by Hong Kong Institute of Asia-Pacific Studies at CUHK

A telephone survey was conducted from 15 to 21 December 2017 by the Hong Kong Institute of Asia-Pacific Studies, The Chinese University of Hong Kong (CUHK) to study public views on the level of property prices in Hong Kong and its influence on residents’ livelihood in recent years. 706 respondents aged 18 or above were successfully interviewed, with a response rate of 37.7%. The sampling error is estimated at plus or minus 3.69 percentage points at a confidence level of 95%.

Major findings are summarized as follows:

With the prolonged “low interest rate” in Hong Kong and the rest of world over the past ten years, prices of residential properties in Hong Kong have kept rising. As the world economy is recovering gradually and the United States has started raising the federal funds target rate, the survey intended to look into public views on the current and future property prices in Hong Kong. An overwhelming majority (89.8%) of the respondents said the current level of prices was too high, only 4.2% of respondents said it was acceptable. A majority of the respondents (74.2%) did not think it was an opportune time to buy a property right now. Only 6.9% thought otherwise. The respondents were asked about their expectation of the level of property prices in the coming year in Hong Kong. 29.2% believed that it would go up, 27.8% believed it would go down while 29.3% expected it would be about the same as the current price level, indicating diverging views by the public.

The survey also looked into how residents’ livelihood was influenced by the high price level of residential properties in Hong Kong. In general, 37% of the respondents felt more negative effects, 35.3% felt mixed effects. Only 7.8% felt more positive effects. The views of tenants living in rented residence (renters hereafter) or tenants in self-owned residences (owners hereafter) were diverged. 56.8% of renters felt more negative effects and 24.7% felt mixed effects. 42.4% of owners felt mixed effects, while 24.6% of them felt more negative effects.

To probe into specific influences, the survey found an overwhelming majority (89.3%) of renters did not feel any increase in their wealth. A majority (52.9%) of owners also had the same feeling. Only a third (32.3%) of the owners felt somewhat increase in their wealth. When asked whether they could spend generously, 82.7% of renters didn’t think so, while 66.4% of the owners shared similar view. Only a fourth (23.8%) of the owners felt to some extent they could. 74.9% of the renters felt the increased burden of livelihood caused by the increasing property prices (including respondents answered “somewhat”, “much” or “very much”), while 56.3% of the owners felt the same. 65.3% of the renters said that they felt the need to reduce their daily spending (including respondents answered “somewhat”, “much” or “very much”), while only 40.3% of owners felt the same need. The results indicated that high property prices only had a modest wealth-increasing effect to the owners while renters felt greater living burdens than owners.

The Burden from paying rent or mortgage installment was another source of stress for the public. Over half (53.3%) of the renters of public housing did not feel much of the burden, while 85.4% of renters of private housing felt “somewhat” (56.2%) or “very much” (29.2%) of the burden. Mortgage installment was “somewhat” (42.9%) or “very much” (9.5%) heavy to 52.4% of the owners of public housing, while 57.8% of owners of private housing felt the installment was “somewhat” (38.8%) or “very much” (19.0%) heavy. The results indicated a heavier burden of paying rent by renters of private housing and of paying installment by owners of private housing.

The timing of buying property was a factor influencing the level of paying burden for the owners. An overwhelming majority (95.5%) of the property owners who bought their property within five years and three fourths (74.5%) of the property owners who  bought their property between five and ten years had not finished paying their mortgage. However, only 24.4% of the owners who bought property ten or more years ago were still paying installment. The burden of paying mortgage was “very much” (38.1%) or “somewhat” (33.3%) heavy to 71.4% of owners who made the purchase within five years. The same levels of burden were felt by two thirds (65.7%) of owners bought property in recent five to ten years and to half (50%) of owners bought property more than ten years ago. The results indicated those who bought the property in recent ten years felt heavier burden of paying installment and less of them had finished mortgage than owners over recent ten years.

The distribution of types of tenants in the surveys included renters of public housing (25.9%), renters of private housing (12.6%), owners of public housing (16.1%) and owners of private housing (44.6%).