Hong Kong’s second-hand home prices fall to lowest since March 2017, with skid set to continue through 2024’s first half

Hong Kong’s lived-in home prices fell by 2.16 per cent in October, dragging the official index to its lowest point in more than six and a half years as transactions hit the lowest level of the year.

The Rating and Valuation Department’s gauge of lived-in home prices slumped to 321.4 – only a whisker higher than 321.2 recorded in March 2017 – from 328.5 in September, according to the latest data, released on Tuesday.

So far this year, second-hand home prices have retreated by about 4 per cent. They have lost 19 per cent from the index’s record high of 398.1 in September 2021. The month-on-month October decline is shallower than the 2.4 per cent drop in September, which is the year’s steepest, according to the latest data.

“In terms of sales volume, 2023 is just slightly better than 2022, and we expect to have 48,000 transactions this year,” said Martin Wong, director and head of research and consultancy for Greater China at Knight Frank. “We expect overall home prices to drop 5 per cent to 6 per cent over 2023 and another 3 per cent to 5 per cent in the first half of 2024.”

People pass residential property advertisements at a real estate agency in North Point on October 29, 2023. Photo: May Tse

For the second half of 2024, home prices are likely to remain flat, Wong said.

As of Monday, 33,767 second-hand homes changed hands so far this year, compared with 36,974 in 2022, according to data compiled by Midland Realty.

October saw 1,917 lived-in homes sold, the lowest monthly total this year. November’s second-hand home sales are unlikely to fare much better, with 1,855 units transacted so far.

Meanwhile, developers have sold 9,562 new units so far this year, compared with 10,243 in 2022, Midland Realty’s data showed.

Last month, Chief Executive John Lee Ka-chiu announced easing of property curbs in his second policy address. These included halving the buyers’ stamp duty to 7.5 per cent for non-permanent residents and residents buying a second or additional home.

The 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 talent are also not required to pay stamp duty on property purchases unless they fail to become permanent residents.

The relaxation of the curbs, originally put in place to cool an overheated market, was unlikely to have a significant impact on the residential market because elevated interest rates continue to make mortgage rates more expensive, analysts said.