Hong Kong home prices flat for second month in June
Prices have dropped 0.9% this year to their lowest since 2016
[HONG KONG] Hong Kong’s home prices were largely unchanged for a second consecutive month in June on lower mortgage rates, government data showed on Tuesday (Jul 29), signalling stabilisation after recent steep declines.
Private home prices edged up 0.03 per cent in June from the month before, following a revised 0.03 per cent rise in May, data from the Rating and Valuation Department showed. In April, home prices climbed a revised 0.5 per cent, ending four months of decline.
Prices have dropped 0.9 per cent this year to their lowest since 2016.
Home prices in Hong Kong, one of the world’s most unaffordable cities, have tumbled nearly 30 per cent from a 2021 peak, hurt by higher mortgage rates, a weak economic outlook, and poor demand as many professionals have left the territory.
Authorities tried to prop up the sector last year, lifting all curbs on property purchases and relaxing down-payment ratios, but housing demand has remained soft.
The one-month Hong Kong dollar interbank rate, or Hibor, which many mortgage plans are linked to, dropped below 1.2 per cent since May from more than 3.5 per cent in the past two years, making mortgage rates more affordable for homebuyers.
Realtors forecast home prices in 2025 could rise or fall by 5 per cent, depending on the pace of official rate cuts and the severity of trade tensions between China and the US.
Brokerages, including Morgan Stanley and HSBC, recently said they expected the Hong Kong residential market to bottom out.
But realtor JLL, which sees a 5 per cent drop in mass residential prices this year, said it does not expect a sustainable recovery until 2026, when inventory could drop to a healthy level. REUTERS
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