Small flats defy Hong Kong’s recession, gaining in price as larger homes continue to lose value

Gains in the prices of small flats in September were enough to push an official gauge back into positive territory for the first time since early summer

Smaller units are more sensitive to a sudden improvement in market sentiment, say analysts, while buyers of bigger properties await signs of long-term optimism

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On Saturday, CK Asset will release 98 units at El Futuro in Kau To Shan. Photo: Jonathan Wong

Published: 3:30pm, 30 Oct 2020Updated: 11:00pm, 30 Oct 2020

Small apartments appear to be bucking a downward trend in Hong Kong’s property sector, gaining in price as the city struggles with a crippling recession.

The prices of bigger homes and commercial property are falling as the coronavirus pandemic, which followed months of social upheaval, has wrought havoc on the local economy, slashing household budgets and causing a spike in unemployment.

But gains in the prices of small flats in September were enough to counter those drops and push an official gauge back into positive territory for the first time since early summer.

The overall home price index rose 0.42 per cent in September to 382.6 after two months of declines amounting to 1.5 per cent, according to data released by the government’s Rating and Valuation Department on Friday.

“The increase was unexpected, but the property market adjustment should continue,” said Thomas Lam, executive director at Knight Frank. “The current real estate market is very distorted.”