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For Hong Kong property prices, the sky's the limit

Hong Kong

IN THE world's most-expensive real estate market, the sky's the limit. Property prices in Hong Kong reached an all-time high on Friday after relentless gains over the past three months.

Home values in the city have now broken their previous record set last August, Centaline data show, making the correction from mid last year through January look like a temporary blip.

The Centa-City Leading Index, which measures the city's used homes values, stood at 189.42 for the week ended May 26, the highest ever. Prices have risen by 8.6 per cent since the beginning of the year.

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Home prices have rebounded on revived sentiment around low interest rates and limited supply. UBS Group said earlier this month that the property market in Hong Kong will remain bullish for another decade, thanks in part to the population influx from mainland China.

In some quarters, the demand has never let up. At Wheelock Properties' Montara project in the Tseung Kwan O area, 103 potential buyers have been vying for each unit, making it the most competitive project since 2013, the Hong Kong Economic Times reported on May 10.

It's grim news for those trying to get on the property ladder. Hong Kong already holds the mantle of the world's least-affordable property market and this will make even basic apartments the preserve of the rich.

A CBRE Group report in April found that the city has the highest average home price at US$1.2 million, as well as the highest average prime property price at US$6.9 million.

Still, others have more bearish predictions. Knight Frank said this week that home prices may dip 5 per cent in the second half due to the uncertainties from the trade war and stock market volatility.

Noted economist and Harvard professor Carmen Reinhart told a conference in Singapore recently that Hong Kong's property market is showing signs of a bubble. BLOOMBERG