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HK home prices down for 4th consecutive month in September

Hong Kong

HONG KONG private home prices dropped at a faster pace in September, marking the fourth consecutive month of decline, according to government data released on Thursday, as the financial city was hit by a political turmoil.

The price drop of 1.8 per cent, in one of the world's least affordable property markets, compared with August revised decrease of 1.4 per cent. "The fall percentage was in line with expectation," said Thomas Lam, executive director of Knight Frank. "I expect the index may still correct downward in the next two or three months."

Mr Lam also expected prices to continue falling next year for another 5 per cent, but a low interest rate environment will provide support.

HSBC on Thursday said it will cut its Hong Kong best lending rate by 0.125 percentage points, following US Federal Reserve's latest rate cut on Wednesday.

Hong Kong has been hit this year by the ongoing US-China trade dispute and five months of often violent anti-government protests.

However, the Chinese-ruled city's sky-high property prices have stayed relatively resilient compared with the tourism and retail sectors amid the latest crisis. Hong Kong's home prices have still recorded a rise of 5.9 per cent so far in 2019. Analysts and property agents, however, expect the home prices to flit between a gain of 5 per cent and a drop of 5 per cent over the remainder of this year.

In September, a flat of 646 square feet on Hong Kong Island cost an average of HK$10.4 million (S$1.81 million), according to official data.

The head of Hong Kong's central bank called on the public to manage financial risks prudently on Thursday, as the local economy faces its first recession in a decade.

Hong Kong chief executive Carrie Lam expanded borrowers' power in the middle of this month by reducing the size of down payments required for home purchases for small-to-medium flats, resulting in a surge in transaction volumes in the secondary market in the last two weeks despite a slowing economy. REUTERS

READ MORE: HK plunges into first recession since the global financial crisis

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