As coronavirus outbreak, containment measures weigh on sector, Hong Kong home prices record biggest drop in 15 months
- Index of used home prices dropped 2.1 per cent in February, Rating and Valuation Department says
- Covid-19 to bring ‘second year of extreme dislocation’ to Hong Kong: S&P Global Ratings
An index of used home prices dropped 2.1 per cent last month, according to the city’s Rating and Valuation Department, its biggest monthly drop since December 2018. The decline also extended a three-month slide in home prices to a one-year low.
The drop might widen to a more “serious” 2.5 per cent to 3 per cent in March, said Derek Chan, head of research at Ricacorp Properties. He added that the downtrend will persist into the second quarter.
“In late February and early March, the turnover edged up because more homeowners slashed prices. So the drop will be even bigger,” Chan said. “In late March, amid the global outbreak, Hong Kong had some imported cases, so the situation was dire. Looking forward, home prices will remain under pressure, with drops of 1 per cent to 2 per cent [in each coming month],” he added.
In a further sign of weakening demand, the number of mortgage applications in February decreased month-on-month by 6.4 per cent to 8,536, the Hong Kong Monetary Authority said on Tuesday.