Hong Kong home prices ease in June for a second straight month
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HONG Kong home prices fell 0.5 per cent from May, easing for a second consecutive month, hurt by expectations of more interest rate hikes and weak consumer confidence in the city’s economic outlook.
“Mortgage rates may continue to rise in the second half, affecting potential homebuyers,” said Martin Wong, head of research and consultancy for Greater China at Knight Frank.
He also noted a raft of new apartments that have come onto the market would keep home prices under pressure.
The drop for home prices in May was revised down to 0.9 per cent from 0.7 per cent. But for the first six months of the year, they gained 4.3 per cent after sliding 15 per cent in 2022.
Major banks in the city, one of the world’s most expensive housing markets, are expected to lift their best lending rates on Thursday (Jul 27) following the US Federal Reserve’s rate hike overnight.
The Hong Kong Monetary Authority earlier in the day raised its base rate by 25 basis points to 5.75 per cent. The city’s monetary policy moves in lock-step with the US as its currency is pegged to the US dollar in a tight range.
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Aiming to help potential buyers, the de facto central bank this month raised its cap on the loan-to-value (LTV) ratio to 60-70 per cent from 50 per cent for properties worth up to HK$30 million (S$5 million).
Property agents said the move has lifted buyer interest but has yet to boost transaction volumes. Realtor Centaline said it expects transaction volumes in July to fall for a fourth month to a seven-month low. REUTERS
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