Hong Kong’s lived-in home prices decline as third wave of virus outbreak halts recovery

Average prices dropped 0.5 per cent in July from June, the most in five months, after government tightened social-distancing rules

Hong Kong tightened rules in July, hurting showroom visits and property viewings, and prompting owners to deepen price cuts

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Lohas Park Sea to Sky housing development in Tseung Kwan O, Hong Kong. Photo: Martin Chan

Published: 1:15pm, 31 Aug 2020Updated: 1:35pm, 31 Aug 2020

Hong Kong’s home prices declined in July by the fastest pace in five months as a third wave of the coronavirus pandemic in the city curbed buying interest and prompted homeowners to offer deeper discounts. Data for August may disappoint further, analysts said.

Prices for lived-in homes weakened 0.5 per cent from June, according to an index published by the Rating and Valuation Department on Monday, the most since a 1.7 per cent pullback in February. The decline halted a two-month advance in prices.

The third wave in early July “suddenly clouded the market” outlook, said Derek Chan, head of research at Ricacorp Properties. “Buyers became more cautious so owners were willing to offer more discounts and price cuts.”

Chan expects the decline in August to deepen by 1.5 to 2 per cent as a resurgence in the viral outbreak forced the government to tighten social-distancing measures last month took a toll on consumer sentiment. Limiting social gatherings to no more than two in late July affected property showroom visits and sales turnover, he added.

Knight Frank said the resurgence in the number of Covid-19 cases in Hong Kong in July and August pressured the local residential market. As a result, total transaction volume of residential property fell by 12 per cent on month to 6,133 in July, it said.

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