Greater Bay Area home prices may lose momentum with a drop in June while Hong Kong’s housing bull market races ahead

Home prices in the mainland Chinese cities that make up the Greater Bay Area (GBA) are poised to fall in June, as a slew of market-cooling measures by local authorities broke the five-month rising streak in residential property prices, standing in stark contrast to Hong Kong’s record-setting market, according to one of the biggest local real estate agency networks.

The Centaline Greater Bay Area Index, which tracks the average home prices across the 11 cities that make up the GBA, “is expected to record a significant decline in June,” after rising to a record of 126.9 in May, according to Louis Chan, Asia-Pacific vice-chairman and chief executive of the residential division at Centaline. Rising prices in Hong Kong are expected to break May’s record this month.

“Both supply and demand decreased simultaneously, which significantly slowed down the increase in the property price index in many cities in the Greater Bay Area,” Chan said in a statement, adding that other contributing factors were local authorities’ property market control measures, sporadic cases of coronavirus outbreak in Guangdong province and lockdown measures enacted in June.

Hong Kong’s property bull run – unencumbered by policy restrictions – is racing ahead of the nine cities in southern China’s Guangdong province that make up the GBA, widening the yawning price gap that could attract investment dollars to pour northwards in search of better value. Record property prices in an economy that is still trying to claw its way out of its worst unemployment and recession on record also exacerbate public grievances over housing affordability, particularly as memories of the 2019 street protests in the city remain raw.