Gloomy outlook depresses HK home prices in December

Hong Kong

PRIVATE home prices in Hong Kong eased again in December, weighed down by a gloomy economic outlook in the financial hub that was hit by a series of violent anti-government protests last year.

The monthly price index, in one of the world's least affordable property markets, declined 1.7 per cent last month, compared with November's revised 1.9 per cent gain, government data showed on Friday.

Home prices in Hong Kong had snapped a five-month decline in November, supported by a jump in small flat transactions after the government relaxed mortgage rules.

Into the new year, property agents expect prices to continue their downtrend until the second quarter, and transaction volumes to shrink due to the new coronavirus outbreak in China.

"The housing market will continue to correct due to a worsening economy; with the virus, now it may correct faster. The impact from the virus may reflect in February," said L. S. Wong, senior associate director of research at realtor Centaline, who expects prices to correct 10 per cent from last year's peak.

Over seven months of often-violent protests have evolved into a broader pro-democracy movement since they erupted in June last year, in response to a now-withdrawn bill that would have allowed extraditions to mainland China, where courts are controlled by the Communist Party.

The property sector has been resilient, compared with the tourism and retail sectors, which have been hit badly by the protests and the US-China trade dispute.

Hong Kong's home prices were still up 4.8 per cent for full year 2019, after having slid 4.6 per cent since May.

Property agents also expect more developers to postpone launches, after Wheelock and Co said on Thursday that it could delay its project as the city's home transactions plunged amid fears of the epidemic. REUTERS