Hong Kong home prices fall for ninth straight month, intensifying calls for lifting property curbs

  • An index tracking second-hand unit prices declined in January to the lowest since October 2016
  • Secondary-market prices of Hong Kong homes have retreated 23 per cent from their peak in September 2021

Hong Kong’s lived-in home prices fell for the ninth straight month in January, dropping 1.57 per cent and dragging the city’s official home price index down to a level last seen in 2016, the latest government data showed.

The sustained decline strengthen the case for the withdrawal of property cooling measures, on the eve of the government’s budget announcement, developers and industry players said. The government and the monetary authority have introduced a variety of duties and rules to cool the city’s hot property market since 2010.

The official price index of second-hand units declined to 306.4 in January, down from 311.3 in December and the lowest since a 304.3 reading in October 2016, according to the Rating and Valuation Department.

Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team.

Secondary-market prices of Hong Kong homes have retreated 23 per cent from their peak in September 2021, according to government statistics. The nine-month losing streak, the longest since the outbreak of Sars (severe acute respiratory syndrome) in 2003, led to an aggregate fall of 13.5 per cent in Hong Kong home prices from April 2023.

hong kong home prices fall for ninth straight month, intensifying calls for lifting property curbs

Residential property advertisements at a real estate agency in Happy Valley. Photo: May Tse

“If the property curbs can be significantly reduced or even completely withdrawn as expected by the market, it will promote a significant increase in transaction volumes and drive up property prices,” said Derek Chan, research head at property agency Ricacorp Properties.

Financial Secretary Paul Chan Mo-po is set to deliver his budget speech on Wednesday, where he is widely expected to take aim at a ballooning deficit, estimated to exceed HK$100 billion (US$12.8 billion), amid growing calls for withdrawing property curbs.

Mid-Levels on sale: buyers hunt foreclosed luxury Hong Kong homes amid distress

Demands from the industry have included scrapping the curbs, such as a special stamp duty applied to a residential property resold within 24 months, a buyers’ stamp duty (BSD) for non-permanent residents and a double stamp duty on flats for second-time purchasers.

Last week, Stewart Leung, chairman of the Real Estate Developers Association of Hong Kong as well as Wheelock Properties, said he met Chan to discuss the possibility of scrapping all property curbs. Leung said the government had “taken note” of the industry’s concerns.

In his second policy address in October, Chief Executive John Lee Ka-chiu announced several measures to relax the decade-old property curbs. These included halving the BSD to 7.5 per cent for non-permanent residents and residents buying a second or additional home.

A special stamp duty of 10 per cent was also waived for homeowners who resell their property after two years, from the previous three-year requirement. Eligible overseas professionals are also not required to pay stamp duty on property purchases unless they fail to become permanent residents.

The relaxation, however, has had little impact on the housing market, according to JLL, with only 16 home sales involving BSD recorded until January. The sales of second-hand units were still lower than the “crucial” 3,500 monthly level, it said.

JLL said historical analysis suggests that home price stabilisation would require monthly secondary residential transaction volumes to remain above 3,500.

“During this round of price corrections, second-hand units, especially those close to new residential projects, suffered a larger decline,” said Eddie Kwok, senior director, valuation and advisory services, CBRE Hong Kong.

Since the second half of 2023, developers have extended discounts of as much 20 per cent to offload their inventory. CK Asset Holdings first offered a 16 per cent discount on 626 units of its Coast Line II project in Yau Tong. Other developers have followed suit, with the latest being Wang On Properties, which offered 165 units of its Phoenext project in Wong Tai Sin last month at a discount of as much as 30 per cent.

“Secondary homeowners need to cut more prices to sell their units,” said Kwok, as developers continue to offer “attractive prices” for their new projects.

The downbeat property market should “provide opportunities for long-term investors or users”, he said.

“The market expects the government will further relax the stamp duty during the upcoming budget,” Kwok said. “We believe this will lend support to the housing prices in the near term. Yet, the residential market outlook still depends on interest rate movement as well as developers’ offer prices for upcoming residential projects.”

This sentiment was echoed by Martin Wong, director and head of research and consultancy for Greater China at Knight Frank, who said that with Hong Kong’s interest rates at their highest in over two decades, removing all property cooling measures are likely to improve only market sentiment, not the prices.

More Articles from SCMP

Rental market thrives for Apple’s Vision Pro as Chinese netizens eagerly await headset’s official launch date

Jimmy Lai steered Apple Daily to play up reports of Hong Kong, mainland officials facing possible US sanctions, prosecutors say

China’s online brokerage Futu eyes Malaysian market following its Singapore foray in overseas expansion drive

From Gaumukh to the Bay of Bengal: one man’s voyage of discovery takes him the length of the Ganges

This article originally appeared on the South China Morning Post (www.scmp.com), the leading news media reporting on China and Asia.

Copyright (c) 2024. South China Morning Post Publishers Ltd. All rights reserved.

News Related


From arts to sciences: Once a teacher, always a teacher

Despite doing education at the university, Mellon Kenyangi, also known as Mama Bear, did not think of going to class, and teaching students was her dream job.“Since it was not ... Read more »

WC squad was picked on players’ performance, says Pramodya

213 Sri Lanka Cricket’s Chairman of Selectors, Pramodya Wickramasinghe reported to the Sports Ministry’s Special Investigation Unit( SMSIU) for the Prevention of Sports Offences yesterday for the second day. He ... Read more »

Malindu Dairy bags Industrial Excellence Silver Award

137 Malindu Dairy (Pvt) Ltd., a leading food production company in Sri Lanka, won the Silver Award in the medium-scale dairy and associated products category at the Industrial Excellence Awards ... Read more »

Africans Urged to Invest Among themselves, Explore Investment Opportunities in Continent

Africans Urged to Invest Among themselves, Explore Investment Opportunities in Continent Addis Ababa, November 27/2023(ENA)-The Embassy of Angola in Ethiopia has organized lecture on the “Foreign Investment Opportunities in Angola ... Read more »

Mohan Wimalaratne will lead Police this season

144 The dynamic front row player Mohan Wimalaratne will lead the Police Sports Club Rugby team at the upcoming Nippon Paint Sri Lanka Rugby Major League XV-a-side Rugby Tournament scheduled ... Read more »

Church assists the disabled in Bulawayo

Dozens of people living with disabilities from New Hope Inclusive in Entumbane, Bulawayo on Saturday last week received an early Christmas gift in the form of groceries. The groceries were ... Read more »

Somalia Joins East African Community

The East African Community (EAC) Summit of Heads of State has admitted the Federal Republic of Somalia to the regional bloc, making it its 8th member country. The decision was ... Read more »
Top List in the World