HONG KONG (Reuters) – Hong Kong’s home prices declined for a third month in February to a nearly nine-year low, government figures showed on Thursday, as the ailing property market struggled to find support amid a weak economic outlook.
BY THE NUMBERS
Private home prices fell 0.9% in February from the month before, following a revised 0.7% decline in January, data from the Rating and Valuation Department showed.
The February price index was the lowest since July 2016.
WHY IT’S IMPORTANT
Home prices in Hong Kong, one of the world’s most unaffordable cities, have tumbled nearly 30% from a 2021 peak, hurt by higher mortgage rates, a weak economic outlook, and poor demand as many professionals have left the territory.
Authorities tried to prop up the sector last year, lifting all curbs on property purchases and relaxing down payment ratios, but housing demand has remained soft.
MARKET COMMENTS
Realtors forecast home prices in 2025 could rise or fall 5%, depending on the pace of official rate cuts and the severity of trade tensions between China and the United States.
Martin Wong, director of real estate consultancy Knight Frank, said the latest price index did not reflect the impact from the stimulus rolled out last month due to a lag effect, and he expected small-sized homes to perform better in the next few months.
CONTEXT
The government in February cut the stamp duty for small home transactions. Homes with values of HK$3 million to HK$4 million ($385,847-$514,462) now have to pay just HK$100 in stamp duty, instead of up to HK$60,000. Property agents said the move could encourage first-time buyers and lift home transactions by 5%-10%.
Major banks, including HSBC and Bank of China (Hong Kong), lowered their best Hong Kong lending rate in December by 25 basis points for the third time last year.
The territory’s currency is pegged to the U.S. dollar, but local banks make their own rate decisions.
($1 = 7.7751 Hong Kong dollars)
(Reporting by Clare Jim; Editing by Sonali Paul)
