Hong Kong home prices rise in Oct, ending five-month decline
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HONG Kong’s home prices rose in October, halting a five-month decline in an early sign that the struggling property market could bottom out after an interest rate cut and an easing of mortgage rules.
Housing demand in Hong Kong, one of the world’s most unaffordable cities, has lost steam since May after a short-lived bounce when all property purchase curbs were lifted in February.
The government last month relaxed the down payment ratio to 30 per cent for all properties, and allowed purchases of luxury homes worth more than HK$50 million (S$8.6 million) to be included in its investment immigration scheme.
Private home prices rose 0.6 per cent in October from the month before, following a revised 1.5 per cent fall in September.
Prices have dropped 6.8 per cent so far this year.
They have tumbled nearly 30 per cent from their 2021 peak, hurt by higher mortgage rates, an outflow of professionals and a weak market outlook.
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Centaline Property Agency expects home prices to rise 3 per cent in the fourth quarter, as sales volumes became more active after rate cuts and supportive policies.
S&P Global revised up its 2025 volume forecast for new home transactions but expects home prices to stay flat, as inventories exceed its annual demand forecast and more supply is on the way.
Hong Kong’s major banks, including HSBC and Bank of China (Hong Kong), lowered their best lending rate in the city by 25 basis points again this month, after a surprised cut in September following the US Federal Reserve’s move.
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Hong Kong’s currency is pegged to the US dollar, but local banks make their own rate decisions depending on their funding costs. REUTERS
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