Hong Kong’s lived-in home prices to revisit 2017 levels as more rate increases prolong housing market correction
- Prices of lived-in homes have retreated 6.1 per cent in a 10-week losing streak, and by 11.2 per cent since the market peaked in August 2021: Centaline data
- Recent transactions in popular housing estates in Taikoo Shing, Shau Kei Wan and Tseung Kwan O show ongoing bearish sentiment
While local authorities have scrapped mandatory quarantine for incoming travellers and lowered the bar on mortgage stress tests, the pressure from policy tightening in the US will mount amid attempts to cool runaway inflation. A steady decline in the local housing market over the past 14 months will play out for longer, Midland Realty said.
Lived-in home prices in Hong Kong fell by 0.8 per cent in the most recent week to September 18, according to the Centa-City Leading Index compiled by Centaline Property Agency. They have retreated by a cumulative 6.1 per cent in 10 straight losing weeks, and by 11.2 per cent from the record-high in August 2021.
Recent transactions in major estates on Hong Kong Island, such as Taikoo Shing, indicate prices have reached a five-year low, while one flat in Shau Kei Wan changed hands for a HK$3 million loss.
“The pandemic has not yet subsided and the timing of the full border reopening has not yet been determined,” said Sammy Po Siu-ming, CEO of Midland Realty’s residential division for Hong Kong and Macau. “Some buyers and owners are still waiting to see the effectiveness of the new Covid-19 measures. Home prices will continue to be under pressure.”
The outlook for the market may improve when the government unveils its plans during the annual policy address on October 19, Po added. Lived-in home prices could fall by as much as 6 per cent by year-end to the lowest since October 2017 without policy support.
