Ratings agency says Hong Kong developers can withstand 30 pct price drop

Kerry Properties

15/02/2016 08:15

HONG KONG, Feb 15 (Reuters) - Hong Kong developers could 
withstand a 30 percent drop in sales prices with no impact to 
their credit ratings, S&P said on Monday, adding that a drop of 
more than 50 percent would have an impact.  
    S&P is forecasting an average home price drop of 10 percent 
to 15 percent in Hong Kong this year, but it said the industry 
could withstand much worse. Average home prices have dropped 9.5 
percent since a recent peak in September. 
    "The biggest risks are a weaker or continued decline in the 
Hong Kong economy and a severe China slowdown," said S&P 
director of corporate ratings, Cindy Huang, adding that there 
could be an additional 5 percent drop in average home prices in 
2017. 
    Sun Hung Kai Properties Ltd  0016.HK  and Nan Fung 
International Holdings have the biggest buffer in the case of a 
sales price drop, S&P said.  
    Kerry Properties Ltd  0683.HK  has the least buffer because 
it has the least amount of recurring income, it added. 
    Hong Kong property prices remain among the highest in the 
world. They have come down somewhat as a result of 
government-mandated cooling measures and an economic slowdown in 
China. A rate hike in the United States late last year is also 
expected to have an impact. 
       
 
 (Reporting by Clare Baldwin; Editing by Miral Fahmy) 
 ((Clare.Baldwin@thomsonreuters.com; + 852 2843 6571; Reuters 
Messaging: clare.baldwin.thomsonreuters@reuters.net)) 
 
Keywords: HONGKONG PROPERTY/RATINGS