Hong Kong May home prices end 4 months of gains to drop 0.7%

Henderson Land Development Co

28/06/2023 03:51

HONG KONG, June 28 (Reuters) - Hong Kong private home
prices retreated 0.7% in May from April, the first fall in four
months, official data showed, as many home buyers stayed on the
sidelines amid uncertainty over interest rate hikes and the
economic outlook.
    The drop in home prices last month in the financial hub, one
of the most expensive markets in the world, followed a revised
0.4% rise in April, according to data released on Wednesday. 
    Market observers, including Bank of East Asia  0023.HK ,
have said they expect banks to raise their best lending rates
again in July, following a 12.5 basis points hike in May, due to
pressure on funding costs. 
    Hong Kong interbank rates rose further in June, with
one-month Hibor  HIHKD1MD= , the benchmark used in pricing
residential mortgage loans, surging to the highest level since
October 2007. 
    Steep discounts offered by property developers on new
launches also added pressure on prices, especially in the
secondhand market. 
    Major developer Henderson Land  0012.HK  this month offered
the first batch of flats in a new development in Kai Tak,
Kowloon, at prices about 15% lower than other new stock in the
same area. 
        Transaction volume in June was expected to fall for a
third month to a five-month low, realtor Centaline said. The
spike in the beginning of 2023 was helped by the border
reopening with mainland China and many new launches by property
developers.    
    The industry has been urging the government to relax some
property market curbs after housing prices dropped 15% last
year. 
    Financial Secretary Paul Chan said on Sunday that Hong Kong
planned to "fine-tune" the maximum size of mortgages available
to some first-time home buyers because some residents wanted to
upgrade homes after starting families, without giving further
details.

 (Reporting by Clare Jim; Editing by Jamie Freed)
 ((clare.jim@thomsonreuters.com;))