50% Off! Beat the market in 2025 with InvestingProCLAIM SALE

Hong Kong home prices rise for second straight month in Feb

Published 03/29/2023, 12:38 AM
Updated 03/29/2023, 12:41 AM
© Reuters. FILE PHOTO: A residential development, in which Evergrande, according to sources, has transferred unsold units to its joint-venture partner VMS Group, is pictured among other buildings in Hong Kong, China, November 27, 2021. REUTERS/Lam Yik
CWK
-

HONG KONG (Reuters) - Hong Kong private home prices climbed 2.2% in February, the second straight monthly increase, helped by improving sentiment after the border with China was reopened, expectations that interest rates are peaking, and a spate of new project launches.

The rise in home prices in February followed a revised 1% gain in January and was the biggest since May 2020, official data showed on Wednesday.

The financial hub this month was ranked by survey company Demographia as the least affordable city in the world in 2022 based on property prices versus median income, with Sydney and Vancouver trailing behind. This was the thirteenth consecutive year that Hong Kong topped the ranking.

"Hong Kong has been given a clear responsibility by the central government to improve housing affordability, and increase house sizes", Demographia said in its report last week.

Beijing identified unaffordable housing as a key cause of discontent in the former British colony, especially among the city's youth, and a driving factor in the sometimes violent anti-government protests of 2019.

Some analysts have raised their 2023 forecasts for housing prices in the city over the past few weeks, expecting a reversal after home prices fell around 15% last year. The fall in 2022 was the first annual drop since 2008, with the property market dragged down by a weak economic outlook, rising mortgage costs and a COVID-19 outbreak at the beginning of the year.

JP Morgan analyst Cusson Leung said he expects a 10%-15% rise this year, driven by a slowing pace in interest rate hikes, a stronger economy and increased purchases by non-locals.

"The significant pick up in high-end residential transactions is a strong vote of buying confidence in the Hong Kong housing market," Leung said in a report.

Recent primary housing projects also recorded strong purchase rates at their launches, Leung said.

© Reuters. FILE PHOTO: A residential development, in which Evergrande, according to sources, has transferred unsold units to its joint-venture partner VMS Group, is pictured among other buildings in Hong Kong, China, November 27, 2021. REUTERS/Lam Yik

Realtor Cushman & Wakefield (NYSE:CWK) expected home prices to rise 5%-10% for the full year, revising its previous forecast of a flat market to a 5% drop, and said transaction volumes would rebound 25%-35%.

Cushman & Wakefield said the reopening of borders and the government's recent move to lower stamp duties for first-time home buyers of small- to mid-sized apartments had prompted more purchases in the residential market.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.