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Mass-market homes hit new price, rental highs

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Prices and rents for mass residential property hit record highs last month as the new government failed to take action to cool the market.

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'The market believes the new government [led by Chief Executive Leung Chun-ying] cannot cool the property market because its authority has been undermined,' David Ng Ka-chun, head of China and Hong Kong property research at Macquarie Capital Securities, said.

According to Centaline Property Agency's Centa-City Leading Mass Index, which charts average sale prices at 85 large housing estates, flat prices on the secondary market climbed to 103.71 points on July 29 from 101.99 points a week earlier. That surpassed the previous record of 103.18 points on October 19, 1997.

Average rents at the 85 estates were HK$20.7 per square foot last month, according to deals handled by Centaline. That was above the previous record of HK$20.6 per sq ft recorded in September last year.

Residential rents rose 9.5 per cent from HK$18.9 per sq ft in February, while property prices increased by 10.5 per cent in the first half.

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'Property prices continue to rise as homebuyers believe the new government will not introduce strong measures to the market,' Centaline associate research director Wong Leung-sing said.

'Also, the US central bank will stimulate economic growth with a third round of quantitative easing and drive people buying homes to hedge against inflation.'

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