HONG KONG - Residential home prices in Hong Kong saw their largest drop in three months in December, despite a short-lived rebound in November, as a half-year of social unrest in the city and Sino-US trade frictions continue to chill market sentiment in the Asian financial hub.
According to the latest statistics by the Rating and Valuation Department, Hong Kong’s home prices saw a 1.66 percent month-on-month decline in December, resuming their downward trend since June, when anti-government protests triggered by the now-withdrawn extradition bill began.
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While apartments of all sizes recorded a price drop, large apartments suffered the most, down 2.45 percent.
While apartments of all sizes recorded a price drop, large apartments suffered the most, down 2.45 percent
The city’s property market saw a short recovery in November, with home prices rising 1.85 percent on a monthly basis, after the government relaxed policies in October to make it easier for homebuyers to purchase properties.
Despite a market downturn in the second half of 2019, Hong Kong’s residential property market showed a positive performance in the first half. As a result, the city’s home prices were still up 5.31 percent for the whole year.
Thomas Lam, Hong Kong-based executive director of real estate consultancy Knight Frank, predicted that Hong Kong’s home prices may fall 5 to 10 percent this year, as the outbreak of the novel coronavirus in the country could deal a blow to the city’s already staggering property market.
The impact of the epidemic has not been reflected in the price index yet, he said. “It is expected that Hong Kong’s home prices will continue to drop in the coming two months and fall by at least 5 percent in the first half of 2020,” he said.
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Due to the epidemic and deterioration of economic situation, Lam said the transaction volume of new and previously owned homes could decline to 56,000 to 60,000 this year.
But Lam said he believes that there is little possibility that the market will experience the same slump as the one in 2003, during the SARS epidemic. Previous experiences show that the property market has a high possibility of a rebound after a steep drop, he said.
