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Hong Kong home prices ease for 2nd consecutive month in July
HONG KONG private home prices fell for the second straight month in July, according to government data released on Friday, amid continued pressure on the local economy from increasingly violent street protests and United States-China trade tensions.
The price drop slowed to 0.1 per cent, compared to June's revised 0.6 per cent fall, but property agents said the deceleration was due to low transaction volumes and they expected the downward trend to continue over the next few months.
"The low volume reflects the gap between buyers' and sellers' expectations," said Buggle Lau, the chief analyst at realtor Midland. "Because of the fast contraction in transactions, the price drop did not accelerate as originally expected."
Mr Lau added that there was some positivity in the fact that there were not many cases of forced selling due to any cash crunch in the market, so he did not expect a fall as big as the 10 per cent correction over the second half of last year.
Some other analysts, however, expect a fall of between 10 per cent and 15 per cent over the remainder of this year.
Realtor Centaline estimated last week that August transaction volumes and value in the secondary home market would drop to their lowest levels in six months, while values in the new home market would drop the lowest in eight months.
A drop in Centaline's valuation index also showed that banks were becoming more conservative about approving mortgage loans, signalling a correction in the market.
Hong Kong's open economy is being hard pressed by the year-long US-China trade war and social unrest since mid-June over a now-suspended extradition bill that would have allowed people to be sent to mainland China for trial in Communist Party-controlled courts. REUTERS