Hong Kong home prices decline for fifth month in Sept

Boc Hong Kong Holdings

29/10/2024 05:13

HONG KONG, Oct 29 (Reuters) - Hong Kong's home prices
dropped for the fifth consecutive month in September, official
data showed on Tuesday, in a struggling property market that
realtors expect to bottom out soon after an interest rate cut
and the government's easing policies.
    
    WHY IT'S IMPORTANT
    Housing demand in Hong Kong, one of the world's most
unaffordable cities, has lost steam since May after a
short-lived bounce when all property purchase curbs were lifted
in February. Realtors said much of the pent-up demand has been
sated, while property developers launched new flats at steep
discounts to boost sales.
    The government this month also relaxed the down payment
ratio to 30% for all properties, and allowed purchases of luxury
homes worth more than HK$50 million ($6.43 million) to be
included in its investment immigration scheme.
    
    BY THE NUMBERS
    Private home prices fell 1.7% in September from the month
before.
    Prices have dropped 7.5% since December. 
    They have tumbled 27.7% from their 2021 peak, staying at
their lowest level since August 2016, hurt by higher mortgage
rates, an outflow of professionals and a weak market outlook.
    
    MARKET COMMENTS
    "We may see residential prices bottoming out in the near
term after five months of decline," CBRE Hong Kong Executive
Director Eddie Kwok said.
    Knight Frank Senior Director Martin Wong expects prices to
drop around 8% for the full year, as interest rates start to
fall.
    UBS expects home prices may rise up to 5% in 2025, driven by
increased demand from mainland China and declining mortgage
rates. The former British colony scrapped the extra stamp duty
for foreign buyers in February. 
    
    CONTEXT
    Hong Kong's major banks including HSBC  0005.HK  and Bank of
China (Hong Kong)  2388.HK  surprised the market in September by
cutting their best lending rate in the city by 25 basis points,
following the U.S. Federal Reserve's interest rate cut.   
    Hong Kong's currency is pegged to the U.S. dollar, but local
banks make their own rate decisions depending on their funding
costs.
($1 = 7.7708 Hong Kong dollars)

 (Reporting by Clare Jim; Editing by Nicholas Yong)
 ((clare.jim@thomsonreuters.com;))