Hong Kong Aug home prices drop for 3rd month, steeper declines forecast

[HONG KONG] Hong Kong private home prices fell for the third straight month in August, according to government data released on Monday, as increasingly violent street protests take a toll on the economy.

Prices dropped 1.37 per cent, steeper than July's revised 0.10 per cent fall, and June's 0.3 per cent decline. It was the biggest percentage decline since December 2018, when prices dropped 2 per cent.

Derek Chan, head of research at property agent Ricacorp, said the fall was within expectations.

"Home prices in September are set to fall more steeply and we may see a drop of about 2 per cent," Mr Chan said, adding anti-government demonstrations and the ongoing Sino-US trade war were pressuring the market.

Prices still managed to gain 8.5 per cent in the first eight months, although analysts and property agents are forecasting anything between a rise of 5 per cent to a drop of 5 per cent for full-year prices.

"The property market performance this year will depend on the situation of Sino-U.S. trade tension as well as the local economy and social conditions," said Thomas Lam, executive director of Knight Frank.

Adrian Cheng, executive vice-chairman of New World Development, said at the group's results press conference last week he expected a high single-digit fall in this correction.

Hong Kong's open economy is pressured by the year-long US-China trade war and social unrest since mid-June over a now-withdrawn extradition bill that would have allowed people to be sent to mainland China for trial in Communist Party-controlled courts.

But the housing sector has been more resilient than others, with new launches this month selling most or all apartments as tight supply continues to keep prices high.

REUTERS