Coronavirus: Hong Kong home prices extend decline in January with more pain in store as Covid-19 adds to economic gloom
- Home prices in secondary market slips again in January as the viral outbreak adds to gloom in city’s economy
- Slump in retail and hotel sectors has prompted Hong Kong government to unveil a record budget deficit to revive growth
Hong Kong's home prices extended a drop in January as the coronavirus outbreak added to the gloom in the economy already reeling from the effects of social unrest in 2019. As the epidemic spreads, the market should brace of a steeper decline in February, according to Ricacorp Properties.
An index of secondary market home prices fell 0.2 per cent to a three-month low of 378.2 in January, according to data released by the Rating and Valuation Department on Friday, following a 1.6 per cent loss in December. A brief rebound in November has failed to gain traction as the economy slipped into a technical recession for the first time in a decade.
“The home price index will see a significant drop in February, possibly up to 2 per cent, as we see home seekers getting cold feet in the market recently,” said Derek Chan, head of research at Ricacorp. “On average, homeowners have slashed 8 per cent off their asking prices, but those who are more eager to sell are offering more than 10 per cent discount to woo buyers.”
A 2 per cent drop would be the biggest monthly decline since December 2018, according to data from the department.
Property sales have come to almost a standstill since mid January as agents and potential buyers alike refrained from gathering in crowded places for fear of catching the virus, prompting some of the city’s biggest real estate agencies to seek rent relief from their landlords.
As the Covid-19 disease strikes fear and panic buying of daily essentials, inquiries from potential home seekers have dropped 50 per cent since late January, according to Chan.