Hong Kong March home prices up 1.1%, first rise in nearly a year

By Thomson Reuters Apr 25, 2024 | 10:51 PM

HONG KONG (Reuters) – Hong Kong’s private home prices reversed a 10-month falling streak in March, climbing 1.1% from February, after the financial city lifted curbs to boost the ailing property market.

The increase in home prices in one of the world’s most expensive property markets followed a revised 1.7% fall in February, official data showed on Friday.

For the first quarter, prices dropped 1.8%, after plunging 20% from their 2021 peak due to higher mortgage rates, an outflow of talent and a weak market outlook.

In late February, Hong Kong removed all additional stamp duties for foreign and second home buyers, as well as on those selling flats within two years of buying them, and the property market immediately celebrated with a jump in transactions.

However, prices are expected to remain suppressed as property developers rushed to launch new sales at steep discounts of up to 30%, and that drew much of the buying interest from the secondary home market.

Realtor Cushman & Wakefield said housing prices have bottomed, but a significant rebound is unlikely due to economic uncertainties amid a high interest rate environment.

It forecast a rebound of 5-7% in prices if the U.S. Federal Reserve cuts interest rates in the second half, which Hong Kong banks could track as the currency is pegged to the dollar, and up to a 40% rebound in transactions for the full year.

A report by realtor Ricacorp this week showed 30% of transactions of second-hand homes were sold at a loss in the first quarter and it expected the trend to continue in the second quarter.

(Reporting by Clare Jim; Editing by Jacqueline Wong)