Has Hong Kong’s home market regained its footing? May’s lived-in price index recorded its biggest gain in 13 months

The average price of Hong Kong’s lived-in homes took a tentative step toward recovery in May, as the city’s coronavirus outbreak stabilised, and some property buyers were attracted by a flood of easy financing to enter the fray.

An index that measures prices in the secondary market rose 1.9 per cent in May, reversing the 0.1 per cent decline in April, marking the biggest monthly jump in 13 months, according to data released by the Rating and Valuation Department. That has brought the average price of a second-hand home to a six-month high, a mere 3 per cent shy of the May 2019 peak, the data showed.

Global central banks are unleashing a record US$6 trillion in low-cost funds this year to staunch the world economy’s plunge into depression, led by the pledge by the US Federal Reserve to keep its base interest rate at zero through 2022.

“Capital from the fresh wave of global quantitative easing will have to end up somewhere, and that is why we see both the property and equity markets performing so well, no matter how bad the underlying economy is, and [regardless of] the political or social tension,” said Alvin Cheung Chi-wai, associate director at Prudential Brokerage in Hong Kong.

Illustrating the point, CK Asset Holdings sold all 462 of its Sea To Sky apartments at Lohas Park, even with a catalogue price 20 per cent higher than comparable projects in the neighbourhood, with as many as 28 bidders vying for every available unit. Vanke Holdings (HK) sold 94 units at The Campton residential development in Cheung Sha Wan on June 2, extending the success of its May 27 sales debut when it sold all 188 units.

The successful sales by CK Asset and Vanke have spurred optimism among some property consultants, with Ricacorp Properties’ research head Derek Chan forecasting prices of second-hand home to rise 2 per cent in June, and increase by at least 5 per cent in the second half, barring unforeseen “black swan” events like a resurgence of the coronavirus outbreak in Hong Kong.