Hong Kong’s used home prices drop by most in 23 months as owners discount their flats to flee Covid-19 fifth wave

Prices fell 1.14 per cent in January, the sharpest decline since February 2020 when the gauge retreated by 1.6 per cent

The worst may be yet to come, according to Ricacorp Properties which forecasts a 4 per cent fall in prices in the first quarter of the year

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Prices fell 1.14 per cent to 388.9 in January, according to an index published by the Rating and Valuation Department. Photo: Sun Yeung

Published: 3:30pm, 24 Feb 2022Updated: 3:35pm, 24 Feb 2022

Hong Kong’s lived-in home prices suffered their biggest drop in almost two years as the fifth wave of Covid-19 prompted anxious owners to offload their flats at steeper discounts.

Prices fell 1.14 per cent to 388.9 in January, according to an index published by the Rating and Valuation Department on Thursday. It was the sharpest decline since February 2020 when the gauge retreated by 1.6 per cent.

The worst may be yet to come, according to Ricacorp Properties which forecasts a 4 per cent fall in prices in the first quarter of the year before a rebound once the fifth wave of the coronavirus is brought under control.

“The number of Covid-19 infections soared to record levels from late January and triggered some anxious homeowners to offer bigger discounts. It will deepen the downward adjustment in the coming months,” said Dereck Chan, head of research at Ricacorp.

He expects to see a 1.5 per cent fall in prices this month, followed by a decline of more than 1 per cent in March.

“A potential interest rate rise in the US will also hurt investment sentiment as it creates uncertainty around the market outlook,” said Martin Wong, director and head of research and consultancy for Greater China at Knight Frank.