Hong Kong home prices to plummet 25 per cent this year in some areas, slump is ‘sharper than it appears’, agents say

Prices of lived-in homes at Hong Kong housing estates may drop by 25 per cent this year, setting off alarm bells as prolonged Covid-19 restrictions, rising interest rates and high emigration drive the worst decline since the financial crisis of 2008, property agents said.

Average prices at two estates, Royal Ascot in Sha Tin and Luk Yeung Sun Chuen in Tseun Wan, have plummeted more than 20 per cent since December 2021 and may end 2022 down 25 per cent, according to Midland Realty.

Prices of lived-in homes declined in the first 10 months of 2022 at 20 estates that Midland tracks, and 16 of those saw prices fall by more than 10 per cent.

An index of lived-in home prices citywide is at a five-year low, and home transactions are down while new-home inventory, cases of negative equity and foreclosed properties are all at multi-year highs.

“The decline in property prices is underestimated,” said Sammy Po, CEO of Midland Realty’s residential division for Hong Kong and Macau. “With the US continuing to raise interest rates and the uncertain economic outlook, housing prices are facing huge downward pressure, and the actual decline is actually sharper than it appears on the surface.”