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Hong Kong’s MTR subway network fails to stem sliding prices as real estate slump picks up pace
- The secondary housing market is sinking further as interest rate rises and a wave of emigration take a toll on demand
- As many as 34 housing estates near railway stations have seen their prices fall between January and July, according to Centaline
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Hong Kong’s secondary housing market is sinking further into the gloom as interest rate rises, competition from cheap new developments and a wave of emigration take a toll on demand, according to analysts.
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Centaline Property Agency expects its Centa-City Leading Index (CCL), a gauge of lived-in home prices, to fall as much as 1.9 per cent to 174 by mid-September.
It sank to 177.43 in the week ended July 31, back down at the level seen in March as the fifth wave of the coronavirus raged.
“Under the influence of interest rate hikes and emigration, the second-hand market has been seeing losses in transactions, and buyers have delayed their decisions to enter the market,” said Kenneth Chiu, principal regional sales director at Centaline.
Even developments close to railways, which tend to be more resilient, are not immune. As many as 34 such housing estates have seen their prices fall between January and July this year, according to Centaline, which tracked 56 projects close to MTR stations.
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“Transactions in the secondary market have shrunk significantly recently, mainly due to the inevitable interest rate hikes in Hong Kong and the developers’ frequent launches of new properties at low prices,” said Louis Chan, Asia-Pacific vice-chairman and chief executive of the residential division at Centaline.
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