Hong Kong home prices rise for 13th month to surpass 2015 record
Buyers are still turning up in droves for new property launches, despite the government’s efforts to curb prices
Hong Kong’s residential property prices, already the world’s highest based on square footage, rose in April for the 13th straight month to a record, surpassing the market’s previous peak of 2015, further underscoring the imperative on the city’s government and monetary authority to deflate the bubble.
The monthly home price index, which represents movements in the second-hand property market, rose 2.1 per cent to 327.4 in April, compared with 320.6 in March, according to the Rating & Valuation Department’s data. Year on year, home prices jumped 19.8 per cent in April
The HKMA was concerned about the ability of Hong Kong’s financial system to cope with any possible downturn in the property market. Following the HKMA’s move, four of Hong Kong’s largest banks raised their mortgage rates by 10 basis points, and cut the ratio of allowable loans.
Those measures are likely to show their effects, putting a ceiling on transactions and apartment prices that have thus far defied gravity, said Knight Frank’s senior director Thomas Lam.
“Home price growth will slow in coming months as mortgage lending curbs could dampen buying desire,” he said. “The government has sent a clear signal that further cooling measures may be rolled out if home prices continue to rise.”