Hong Kong home prices slip again, security law may keep the lid on market recovery, analysts say

Prices slip in April after a small gain in March, according to government data

The plan for national security bill could derail signs of market appetite after encouraging home sales in recent weeks

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Aerial view of residential buildings in front of Lion Rock in the Yau Tong area, east of the Kowloon Peninsula in Hong Kong. Photo: Sun Yeung

Published: 2:30pm, 29 May 2020Updated: 3:06pm, 29 May 2020

Hong Kong homes prices dipped in April, with analysts predicting the market to come under renewed pressure from Beijing’s controversial plan to impose a security law tailor-made for the recession-hit city.

The index for used homes fell 0.13 per cent, according to data released by the Rating and Valuation Department on Friday. This reversed a 0.7 per cent gain in March. The gauge has now retreated 5.3 per cent from the peak in May last year.

Cracks in Hong Kong’s housing market could widen in the coming weeks after China endorsed the proposed law that roiled the city’s property and stock markets. President Donald Trump is preparing to unveil new policies on China, after his administration this week determined Hong Kong has lost its autonomy from China.

“It is uncertain now. The market is volatile,” said Derek Chan, head of research at Ricacorp Properties. “If buying confidence is again dampened by the impact on economy after the security legislation and US actions, home prices may come under pressure.”

More than 360 people were arrested this week in street protests against the national security plan, stoking concerns more unrest will grip the city.

That latest upheaval could chip away at tentative signs of revival in the world’s least affordable housing market even as the government unveiled a record expansionary budget to revive the economy.