Wealthy investors in Hong Kong and China are parking cash on the sidelines as they turn cool toward the property market, according to two surveys of individual investors.
Investor appetite for all asset classes has weakened since the start of the year, and real estate had become the most unpopular investment at the end of the first quarter, according to a survey of 500 upper-middle class and high-net-worth investors in Hong Kong by life insurer Friends Provident International.
For the first time since the company began tracking investor sentiment in 2012, more Hong Kong investors expressed negative views of property than those who said it was a good time to invest, the data showed.
'The overall perception is that property isn't a good bet,' said James Tan, managing director at Friends Provident International, which manages US$11.1 billion in assets in Asia and the Middle East.
Activity in the property market is falling off, possibly due to cooling measures introduced by the Hong Kong government late last year, he said.
Buyers are getting the message that prices are likely to fall--the question is by how much.
Since it's hard to judge whether the property market is beginning a sharp correction or a lengthy period of stagnation, the temptation is to wait and see, said Tim Ruan, a Hong Kong-based lawyer who has been seeking to buy a property in the city with his fiancée for the past six months.
Asking prices dropped around 10% between the end of last year and March but have barely budged since, Mr Ruan said. 'So I'm kind of sitting on the fence,' he said. 'I'm looking, but I'm not sure if I'll buy at this stage.'
A similar aversion to property in favor of other assets was found among middle- and high-income investors across Asia in a separate study by Manulife, Canada's biggest insurer, with US$269 billion of assets under management worldwide.
Banks including Nomura, Citigroup and J.P. Morgan have warned of a correction in the Chinese property market after unsold real estate rose to a record level in April. Moody's Investors Service, the ratings agency, downgraded the industry outlook from 'stable' to 'negative' on Wednesday.
Hong Kong's property market has reached 'a bit of a stalemate' between buyers and sellers, with broad prices unlikely to change substantially in the near term, said Ronald Chan, head of equities for Asia at Manulife Asset Management.
Sales volumes remain weak, while potential buyers in China were concerned about the effects of oversupply on property values, he said. Still, buyers were clearly willing to invest in both Hong Kong and mainland China for the right price, and were quickly snapping up properties when developers offered significant discounts to clear inventory, he added.
Manulife's study found an improved appetite for stocks and fixed-income investments this year, and the region's investors may return to Asian equities in when the right catalyst emerges, Mr. Chan said.
'They understand valuations are cheap, but they've been cheap for some time. And they're sitting on a lot of profits from the developed market space.'
Anxiety around Chinese real estate has fueled a withdrawal from equity markets in Hong Kong and China even as Western markets soar to record levels this year. This prompted the state-controlled Xinhua news agency to publish a lengthy editorial Wednesday explaining why China was unlikely to see a property market crash like those seen in the U.S., Japan and Hong Kong in recent decades.
自今年年初以来，投资者对于所有资产类别的兴趣都有所减弱。根据寿险公司友诚国际有限公司(Friends Provident International)对香港500名中上层人士、高净值资产投资者进行的调查，截至第一季度末，房地产属于最不受欢迎的投资类别。
在中国4月份房地产存量升至纪录水平之后，野村(Nomura)、花旗(Citigroup)和摩根大通(J.P. Morgan)等投资银行纷纷警告称中国房地产市场将出现调整。穆迪投资者服务公司(Moody's Investors Service, 简称：穆迪)周三将该行业的信用评级展望从稳定下调至负面。
宏利投信(Manulife Asset Management)亚洲股市部门主管Ronald Chan表示，香港房地产市场的买家和卖家之家已陷入略微胶着的状态，近期内整体价格不会出现大幅变动。