Hong Kong’s second-hand home price falls for the first time since December as May’s index dips on supply glut and looming rate hikes
- Hong Kong’s official lived-in home price index declined to 351 in May, according to data from the Rating and Valuation Department
- The index could drop by as much as 1 per cent in June given the lack of positive factors to support price growth, Knight Frank’s Martin Wong says
Industry observers expect prices to continue to fall, with property consultancy Knight Frank predicting declines of up to 5 per cent for the whole year. Last year, property prices fell 15 per cent because of the impact of the pandemic and a weak economy.
“We expect the home price index in June to drop another 0.5 to 1 per cent, as the market lacks positive factors to support price growth,” said Martin Wong, Knight Frank’s Greater China head of research and consultancy.
“Following the revenge-buying rebound in the first four months, factors such as high interest rates, insufficient buying power and the accumulation of new inventory have hindered a further rise in home prices.”
In the second half of this year, mortgage rates could still rise, which will weigh on prospective buyers, Wong said, noting that the interest rate factor will not fade until early next year.
