SINGAPORE (EDGEPROP) - US investment bank JPMorgan said emigration has had little effect on Hong Kong's property market, and that home prices were on course to set a record in a month or two's time. (See also: Vaccination lottery: a peek at the $1.9 mil flat aimed at moving the needle in Hong Kong's fight against Covid-19)

"The chances of breaking the record are very high, because [home prices are] just 1 per cent to 2 per cent from their peak," said Cusson Leung, head of Asia property research at JPMorgan. Leung also said he expected prices will rise 5 per cent to 10 per cent this year.

Strong housing demand from local users in Hong Kong, the world's most expensive property market, quantitative easing and a short supply have fuelled a rally in home prices despite talk of Hongkongers leaving the city following the protests of 2019 and the implementation of a controversial national security law.

Home prices and transaction volumes have kept rising, even if the wave of emigration was real, Leung said. He questioned the impact of emigration on the market and wondered whether the people said to be leaving owned homes, and how many would actually sell their properties.

"This proves that the number of people selling properties is far smaller than the number of people buying properties," he added.

The US bank is not alone in expecting an increase in Hong Kong home prices.

These prices will reach a new high in the fourth quarter, said Hannah Jeong, head of valuation and advisory services at Colliers International. "The demand is very, very strong due to the low interest rate [environment] and the ample money in the market," she said. "Unfortunately, home seekers might have already missed the golden window for snapping up a cheaper home, seen late last year."

Centaline Property Agency and Ricacorp Properties, two of the city's biggest property agencies, also said they expected home prices to rise to new highs, as the current levels were marginally below a peak seen in May 2019.

A price index compiled by the city's Rating and Valuation Department shows mass lived-in homes measuring less than 431 sq ft had already set a price record in May of 439.9. An overall index shows that in May this year a five-month rally in home prices stood just 0.8 per cent shy of the 2019 peak. The rally came after a brief slump because of the coronavirus outbreak last year.

Sentiment is so red hot at the moment that a buyer this week bought a 265 sq ft flat at Tak Bo Garden in Kowloon Bay in just an hour. He was optimistic about the prospects of home prices and was, in fact, worried that it would be more expensive to buy later, according to Midland Realty.

The average price for lived-in homes rose to a new high of HK$9.07 million ($1.6 million) in the first half of this year, the highest since records began in 1996, according to Ricacorp Properties. It smashed the previous record of HK$8.99 million set in the first half of 2019 along the way.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2021 South China Morning Post Publishers Ltd. All rights reserved.