HONG KONG (Reuters) -Hong Kong’s monthly home prices rose 0.4% in July for a fourth successive month in accelerated growth, government data showed on Wednesday, supported by warming sentiment on lower mortgage rates and better stock market performance.
BY THE NUMBERS
Private home prices edged up 0.4% in July over June, following a climb of 0.03% each in May and June, data from the Rating and Valuation Department showed. July’s rise was the fourth month in a row.
Prices had dropped 0.4% this year.
WHY IT’S IMPORTANT
Home prices in Hong Kong, one of the world’s least affordable 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, removing curbs on property purchases and relaxing ratios on down payments, but housing demand has kept soft.
CONTEXT
The one-month Hong Kong dollar interbank rate HIBOR, to which many mortgage plans are linked, rebounded to 2.8% in mid-August after having dropped below 1.2% since May, from more than 3.5% in the past two years, which had made mortgages more affordable.
Property developers have been selling new flats at discount to boost sales, suppressing the secondhand market, which the official price index reflects.
WHAT’S NEXT
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 tension between China and the United States.
Brokerages including Morgan Stanley and HSBC recently said they expected the Hong Kong residential market to bottom out.
“Signs of a bottom-out in residential prices are becoming more evident,” said Eddie Kwok, executive director of property consultancy CBRE Hong Kong.
(Reporting by Clare Jim; Editing by Clarence Fernandez)
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