Hong Kong property market narrowly avoids first annual decline in home prices in 12 years as demand defies coronavirus

Demand during the fourth wave of infections defied predictions and kept the price index for lived-in homes in positive territory last year

Property prices in 2021 will depend largely on when the border with mainland China is reopened, says Thomas Lam, executive director at Knight Frank

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Sales of first-hand properties should be strong for at least the first half of this year, said Thomas Lam, executive director at Knight Frank. Photo: Dickson Lee

Published: 2:28pm, 27 Jan 2021Updated: 4:55pm, 27 Jan 2021

Hong Kong’s home prices narrowly avoided their first annual decline in 12 years as the fourth wave of coronavirus dealt a less savage blow than expected to December’s data.

The price index for lived-in homes in December fell 0.4 per cent to 379.3, stretching a three-month losing streak to 1 per cent, according to data from the Rating and Valuation Department released on Wednesday.

That left the index a fraction above its reading of 379.2 in December 2019. However, it was below the level of 379.7 recorded in January and was the lowest reading since 377.5 in April last year.

The index has tumbled 4.4 per cent from its record high of 396.9 in May 2019.

Demand had been strong enough to prevent an overall decline in 2020, according to Derek Chan, head of research at Ricacorp Properties.

December’s drop of 0.4 per cent was less than the 1 per cent forecast by the agency.