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 Deutsche Expects HK Home Prices to Fall 10% in 2016, Retail Rent to Recede 20%

 According to Deutsche Bank's forecasts in its research report, Hong Kong's economic performance will continue to ease. The research house remained its cautious view on the property market in 2016 and expected Hong Kong's home prices to retreat approximately 10% in coming twelve months, with the primary market gaining further market share. On the other hand, the overall retail rents should decline by up to 20% in 2016 due to softness in retail sales. The office market will be the only bright spot. The research house projected a 10% increase in Central Grade-A office rents in 2016, driven by limited new supply, tight vacancy and continuous demand from Chinese companies.

Deutsche Bank mentioned that the top picks of Hong Kong developers are CK PROPERTY (01113.HK)  +1.300 (+2.510%)    Short selling $823.18K; Ratio 0.205%   (for its relatively low land cost), SINO LAND (00083.HK)  +0.040 (+0.340%)    Short selling $926.52K; Ratio 1.645%   (for high net cash position and high dividend yields supported by recurrent income), and MTR CORPORATION (00066.HK)  0.000 (0.000%)    Short selling $30.16M; Ratio 25.676%   and HANG LUNG PPT (00101.HK)  +0.060 (+0.326%)    Short selling $2.06M; Ratio 1.956%   (for their defensive portfolios). Meanwhile, the broker also preferred NEW WORLD DEV (00017.HK)  +0.020 (+0.258%)    Short selling $17.28M; Ratio 13.673%   for its attractive valuation and improving management track record.

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