Hong Kong home prices rise in Oct, ending five-month decline

Boc Hong Kong Holdings

27/11/2024 08:44

HONG KONG, Nov 27 (Reuters) - Hong Kong's home prices
rose in October, halting a five-month decline in an early sign
that the struggling property market could bottom out after an
interest rate cut and an easing of mortgage rules.
    
    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. 
    The government last month 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 rose 0.6% in October from the month
before, following a revised 1.5% fall in September.
    Prices have dropped 6.8% so far this year. 
    They have tumbled nearly 30% from their 2021 peak, hurt by
higher mortgage rates, an outflow of professionals and a weak
market outlook.
    
    MARKET COMMENTS
    Centaline Property Agency expects home prices to rise 3% in
the fourth quarter, as sales volumes became more active after
rate cuts and supportive policies.
    S&P Global revised up its 2025 volume forecast for new home
transactions but expects home prices to stay flat, as
inventories exceed its annual demand forecast and more supply is
on the way.
    
    CONTEXT
    Hong Kong's major banks, including HSBC  0005.HK  and Bank
of China (Hong Kong)  2388.HK , lowered their best lending rate
in the city by 25 basis points again this month, after a
surprised cut in September following the U.S. Federal Reserve's
move.   
    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 Christina Fincher)
 ((clare.jim@thomsonreuters.com;))