Hong Kong’s July used-home price index drops to 8-year low amid tepid property market

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Hong Kong’s housing industry is mired in a slump, as a huge stock of new homes combines with borrowing costs at a 23-year high

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The construction site of Kai Ying Court in Kai Tak, one of the latest sales of the home ownership scheme. Photo: Elson Li

Cheryl Arcibal

Published: 10:49am, 28 Aug 2024Updated: 2:00pm, 28 Aug 2024

The prices of lived-in homes in Hong Kong fell 1.9 per cent in July from the previous month, dragging the official benchmark to its lowest level in nearly eight years, according to data from the Rating and Valuation Department.

The index of second-hand homes fell to 296.8 in July, the lowest level since a September 2016 reading of 296.2, according to the data. It was the third consecutive month of decline.

Hong Kong’s housing market is mired in a slump, as a huge pipeline of upcoming and unsold homes combines with the highest borrowing costs in more than two decades to sap purchasing demand. The slump has extended into the secondary market, where prices of lived-in residential property have already retreated by 4.7 per cent so far this year, erasing brief spurts of euphoria in March and April after the government removed some purchase duties.

The July decline was the largest monthly slide recorded by the index this year. In June, lived-in home prices dipped 1.01 per cent.

“In July, the decline in property prices expanded to the largest monthly drop in nearly eight months, primarily due to new developments being launched at lower prices,” said Derek Chan, head of research at Ricacorp Properties.

More pain lies ahead, according to analysts.

Chan forecast that lived-in home prices this month are also likely to fall by another 1 per cent, bringing the overall decrease to 3.4 per cent for the third quarter.