Hong Kong home prices drop faster in July

HONG Kong’s private home price declines accelerated in July as they fell for the third month in a row, hurt by potential buyers waiting on the sideline for more rate cut signals.

Home prices in one of the world’s most expensive property markets fell 1.9 per cent in July from June, following a revised 1 per cent drop in June, official data showed on Wednesday (Aug 28).

Demand has lost steam since May after a short-lived bounce thanks to the lifting of all property purchase curbs in February, as realtors said much of the pent-up homebuying quest has been sated while property developers launched new flats at steep discounts to boost sales.

The prices have tumbled 25.4 per cent from their 2021 peak, hitting the lowest since September 2016, hurt by higher mortgage rates, an outflow of talent and a weak market outlook.

Realtors expected prices would continue to soften until banks in the city start to cut interest rates, which is expected to happen late this year or early next year.

Hong Kong’s de facto central bank keeps its policy in lock-step with the US Federal Reserve as the city’s currency is pegged to the greenback, but local banks make their own rate decisions depending on their funding costs. REUTERS