Hong Kong home prices post marginal gain in 2020

Hong Kong

HONG Kong private home prices, among the most expensive in the world, eked out a tiny gain in 2020 amid the coronavirus pandemic, data showed on Wednesday, barely extending a run of increases dating back to 2009 when prices were only a third of the current level.

According to preliminary property index data though could yet be revised downward, prices grew by a fraction last year, giving a December index reading of 379.3 versus 379.2 for 2019.

Home prices in the Asia financial hub have been resilient despite the social unrest in 2019 and Covid-19 outbreak in 2020, supported by robust demand and low interest rates.

Still, prices eased by 0.4 per cent in December, the third consecutive month of decline, according to the data, compared with a revised 0.2 per cent drop in November.

Realtors generally expect prices will continue to soften in the first half of this year pending coronavirus vaccinations being made widely available.

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Beyond that, property consultancies Savills and Colliers both expect up to 5 per cent price rises in the mass residential market over the full year.

Savills said long-term positive factors such as abundant liquidity and low real interest rates supporting demand are likely to outweigh short-term negative factors, including a rise in unemployment.

Property developers stepped up the rollout of new launches in the New Year, selling over 1,000 new flats so far in January, 80 per cent more than in December, according to industry surveys.

A survey of 500 Hong Kong residents conducted by Citi Hong Kong in December shows 43 per cent of respondents expected property prices to stay steady this year, while 8 per cent considered it was a good or excellent time to buy a home, compared with 10 to 11 per cent in the previous three quarters, and 5 per cent a year ago, before the emergence of the Covid-19 pandemic.

"Having witnessed the cyclical fluctuations in the Covid-19 pandemic, the public were undeterred by the fourth wave of the outbreak and stayed calm and confident in the property market despite the impact of the pandemic," Citi said. REUTERS