Is this the beginning of the end of the growth in Hong Kong’s runaway home prices?
Although prices rose for a 26th consecutive month in May, the 1.67pc rate of growth was lower than the 1.76pc seen in April
The prices of lived-in homes in Hong Kong gained for a 26th straight month, but the rate of increase has slowed a bit, and is expected to slow even further in the second half after the government imposes a vacancy tax on empty flats.
An index of secondary-market home prices rose 6.3 points, or 1.67 per cent, to 382.6 in May, according to data released by the Rating and Valuation Department. That is slower than the 1.76 per cent gain in April.
The rental index rose 0.2 per cent to 190.9, reflecting an increase in leasing costs.
“Hong Kong’s home prices have smashed records every month this year and we do not see the increase ending any time soon,” said Derek Chan, head of research at Ricacorp Properties. “One record high after another is making people panic.”
Ricacorp expects home prices to increase by another 1.5 per cent in June, taking the total gains for the first six months of the year to 10 per cent. Chan, however, expects the growth to slow down in the second half year once the vacancy tax comes into effect.