In September, house prices in Hong Kong’s real estate market fell for the fifth consecutive month. Official data released on Tuesday shows the real estate sector’s downturn continues, with experts predicting the sector could be nearing its lowest point following recent policy interventions. are.
Private housing prices in Hong Kong in September fell 1.7% from the previous month. Since December, prices have fallen a cumulative 7.5%. Furthermore, home prices have plunged 27.7% since their peak in 2021, to their lowest level since August 2016. This decline is due to a variety of factors, including rising mortgage rates, an exodus of professionals, and generally pessimistic market forecasts.
Despite the economic slowdown, real estate experts are expressing cautious optimism. CBRE Hong Kong CEO Eddie Kwok said: “After five months of decline, house prices may bottom out in the short term.” Martin Wong, a senior director at Knight Frank, expects prices to fall by about 8% for the year, although a rebound is expected once interest rates start to fall.
Analysts at UBS predict that house prices could rebound by up to 5% in 2025 due to increased demand from mainland China and lower mortgage rates. This optimism stems from February’s decision to remove additional stamp duty imposed on foreign buyers.
Hong Kong’s real estate market, known for soaring house prices, briefly recovered in February when all restrictions on property purchases were lifted, but demand has slowed since May. Real estate agents have suggested much of the pent-up demand has been met, with property developers offering new apartments at deep discounts to boost sales.
In an effort to revitalize the market, the government has recently taken measures such as lowering the entry rate for all properties to 30%. Additionally, the government expanded the investment immigration system to include luxury homes costing more than HK$50 million ($6.43 million).
Separately, major Hong Kong banks such as HSBC and Bank of China (Hong Kong) followed the lead of the US Federal Reserve and cut their prime interest rates by 25 basis points in September. The cut was unexpected because Hong Kong’s currency is pegged to the U.S. dollar and local banks typically set their own interest rates based on their cost of funding.
Reuters contributed to this article.
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