HONG KONG (Reuters) -Hong Kong’s home prices slipped for a fourth month in March, government figures showed on Monday, as the ailing property market faced more economic headwinds.
BY THE NUMBERS
Private home prices fell 0.5% in March from the month before, following a revised 0.6% decline in February, data from the Rating and Valuation Department showed.
The March 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 by 5%, depending on the pace of official rate cuts and the severity of trade tensions between China and the United States.
Eddie Kwok, executive director of real estate consultancy CBRE, said investment appetite was again negatively affected in April due to global uncertainty, and it could lead to a slight decrease in home prices in the next few months as potential buyers take a wait-and-see approach.
Martin Wong, director of Knight Frank, said the U.S. might lower interest rates again soon to stimulate the economy, and Hong Kong would follow suit and benefit the property market.
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 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 Mrigank Dhaniwala)
