HONG KONG (Reuters) – Hong Kong’s home prices fell for a second straight month in January, government figures showed on Friday, as potential homebuyers searched for more positive market signals amid a weak economic outlook.
BY THE NUMBERS
Private home prices fell 0.4% in January from the month before, following a revised 0.9% decline in December, data from the Rating and Valuation Department showed.
For the full year of 2024, the price drop was revised to 7.2%.
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, less demand after many professionals left the territory and a weak economic outlook.
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.
The government this week cut the stamp duty for small home transactions. Homes with values of HK$3 million to HK$4 million now have to pay just HK$100 ($13) 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%.
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 home prices may see less pressure in the second half when housing inventory decreases from high levels.
CONTEXT
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.
(Reporting by Clare Jim; Editing by Edwina Gibbs)
