Hong Kong home prices end seven-month decline with 0.6% rise in January

HONG Kong private home prices edged up 0.6 per cent in January from December, the first increase in seven months, official data showed on Friday (Feb 24), as reopening of the border with mainland China and expectations of peaking interest rates improved sentiment.

The rise in home prices in January in one of the world’s most unaffordable housing markets followed a revised 1.3 per cent fall in December versus November.

Private home prices in the financial hub fell a revised 15.2 per cent in 2022 in the first annual drop since 2008, dragged down by a weak economic outlook, rising mortgage costs and a Covid-19 outbreak at the beginning of that year.

“The rise was probably a ‘revenge-style’ rebound due to the news of China’s border opening, but negative factors will continue to pressure prices in the short term,” said Martin Wong, head of research and consultancy at Knight Frank Greater China.

Hong Kong on Wednesday lowered stamp duties for first-time home buyers of property valued at HK$10 million (S$1.7 million) or less – mainly small to mid-sized apartments – with a view to easing the burden on ordinary families.

Financial Secretary Paul Chan said he expected the adjustment to have little impact on the housing market but property agents said it could help boost sentiment, with small to mid-sized apartments accounting for 80 per cent of current sales volume.

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They said developers launching new projects at discounted prices is also helping drive transactions.

Envisaging more Chinese investment after the world’s second-largest economy dismantled its stringent Covid-19 containment regime, and with slowing interest rate hikes, transaction volume and value rose to a three-month high in January, and increased another 50 per cent by mid-February, realtor data showed.

New World Development Co chief executive Adrian Cheng told an earnings conference on Thursday he expected recovery in the economy and housing market to pick up momentum in the second half of the year, partly benefiting from a scheme to attract overseas talent. REUTERS