HK home prices slump 4pc in past five weeks
Hong Kong home prices are falling at a faster pace, slumping 4.05 per cent over the past five weeks, says Centaline Property Agency.
Centaline said the secondary market was hit by economic uncertainties and seasonal factors.
According to its Centa-City Leading index, a weekly index that reflects transaction prices at major housing estates in the secondary market, home prices in the week of January 8 stood at 94.16 per cent of their 1997 level.
That is 4.05 per cent below the price level achieved in the week of December 11.
During the five-week period from November 6 to December 4, home prices rose 1.26 per cent.
Home prices on Hong Kong Island fell 4.98 per cent during the five weeks to January 8, while Kowloon prices declined 4 per cent, and New Territories prices edged down 0.4 per cent.
Louis Chan, managing director (residential) of Asia Pacific at Centaline, expected the city's housing market to remain slow, with weak buying interest ahead of the Lunar New Year. Chan said business might pick up after the holiday.
HSBC recently forecast that home prices would fall 15 per cent this year, returning the Centa-City Leading Index to about 82 points, similar to its August 2010 level and 20 per cent below its 1997 peak.
While macroeconomic headwinds point to a downturn in Hong Kong's property sector this year, HSBC does not expect it to be as severe as the Asian financial crisis in the late 1990s, or during the global financial crisis a few years ago.
'With the overall economy still expected to grow a solid, albeit slowing, 3 per cent and supply remaining tight, we expect only a moderate downturn,' said HSBC.
Following the downturn, Hong Kong's overall residential yield would rebound to 4.2 per cent from the current 3.5 per cent, HSBC said.