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<Research>CLSA Expects CN Overseas Investment Supervision to Pose 2-3% Negative Impact on HK Home Demand, Forecasts Home Price Growth to Slow to 5% Next Yr
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CLSA issued a report estimating that newly introduced regulations on overseas investment by Mainland Chinese government may pose a 2-3% negative impact on overall housing demand in Hong Kong. However, the broker believes that stabilization in the mainland property market will give rise to higher conversion rate from mainland talent inflow towards property demand, thereby offsetting the impact of the above regulations and potential US rate hikes. The new mainland rules on overseas investment involve individual investors, although detailed implementation measures have yet to be formulated, the report said. CLSA believes that real estate is not the primary target of regulation. It estimates that buyers without Hong Kong identity cards account for a high-single-digit percentage of total transactions in Hong Kong, and market sentiment may affect one-third of this segment, equivalent to 2-3% of total transaction volume. Under its base case, CLSA forecasts Hong Kong residential property prices to climb by 12% in 2026, reflecting a total 9% increment in the CCL for secondary home prices in the first five months. Growth is expected to ease to 5% in 2027. As property price gains moderate, the relative upside may gradually shift to Chinese property stocks, particularly as valuations of Hong Kong developers have returned to normal levels. CLSA continues to expect Chinese property developers to outstrip Hong Kong developers. Auto-translated by AI This article was automatically translated by AI, the original language version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. More Details
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