HK home prices tipped to rise 11pc this year
Home prices in Hong Kong resumed their upward course last month after a dip in December, rising an average of 2.1 per cent month on month. The average home cost 19.6 per cent more than a year earlier.
Property agent Midland Realty said buyers had begun returning to the market following the government's imposition in November of cooling measures to rein in price growth and curb speculation on homes.
Another agent, Centaline Property Agency, said home seekers had decided to buy sooner rather than later as they were concerned prices would rise at an even faster pace after the Lunar New Year holiday.
Midland Realty's chief analyst, Buggle Lau Ka-fai, expects the government to introduce more cooling measures to slow the growth in prices. Still, he expects the average home to cost 11 per cent more by the end of the year than it did last month, when the average price per square foot was HK$5,345. Midland Realty, one of the two biggest property agents in the city, noted that the average price is still 14 per cent below the HK$6,208 per square foot at the market's peak in June 1997.
Lau said the price increase reflected buyers' positive expectations for the property market despite the cooling measures. Sales were barely affected when the government announced policies to cool the housing sector in November. Average home prices fell 0.4 per cent month on month in December, Lau said.
The government announced additional stamp duty would be levied on homes resold within two years. The additional duty was set as high as 15 per cent if a home was resold within six months.
The Hong Kong Monetary Authority also reduced the amount that banks could lend to buyers of homes worth HK$12 million or more from 60 per cent of the property's value to 50 per cent. The maximum mortgage ratio for properties worth between HK$8 million and HK$12 million was cut from 70 per cent to 60 per cent.
'Sales volume has been picking up and prices are increasing as home seekers are gradually digesting the impact of the measures,' said Lau. 'The continuing low interest rates, pay rises and bonus payments contributed to the improved buying sentiment last month.'
Centaline painted a similarly positive picture. Sales of second-hand homes at the 10 largest housing estates last month rose 6.58 per cent to 729, compared with the 684 deals achieved in December.
Sales totalled HK$2.91 billion, against December's HK$2.54 billion.
Sales at several big housing estates jumped last month compared to December. At Taikoo Shing, sales were up 60.3 per cent at 93.
However, Centaline said that citywide, the number of confirmor sales of second-hand flats - resales before transactions are completed - fell 54.84 per cent last month to 70 from 155 in December. This was the lowest figure in 22 months, it said.
The value of confirmor sales amounted to HK$334 million in the secondary market, against HK$489 million in December.
Centaline said the drop was the result of the government's anti-speculation measures. Many speculators had stayed away from the market since the special stamp duty was introduced.
Room to grow
Despite recent rises, the average Hong Kong home price is still below the market peak of June 1997 by this much: 14%
