November rise in Hong Kong used home prices proves to be short-lived
- Sales of used homes jumped to a six-month high of 5,336 transactions in November
- Increase driven largely by a relaxation in the city’s mortgage policy
The prices of lived-in Hong Kong homes rose in November after five months of declines, the city’s Rating and Valuation Department said on Tuesday.
But the 1.78 per cent increase, driven largely by a relaxation in the city’s mortgage policy, has proved to be short-lived, property agents said after December recorded declining numbers.
Prices in Hong Kong’s secondary market jumped to 384.1 last month, according to an index compiled by the Rating and Valuation Department.
“It is the sharpest growth in the past seven months,” said Derek Chan, head of research at Ricacorp Properties. He attributed the earlier than expected rebound to easing measures announced mid-October by Hong Kong leader Carrie Lam Cheng Yuet-ngor. The number of sales of used homes jumped to a six-month high of 5,336 transactions in November, as a result.
The number of property transactions – including homes, offices, industrial units, shops and car parking spaces – have, however, dropped 48 per cent to 3,473 in the December 1 to 27 period, compared with 6,701 in November, Midland Realty said.
The sales of new flats dropped 75 per cent to 562 deals in this period, while transactions involving lived-in homes dropped 37 per cent to 2,392 despite efforts by the government to ease mortgage refinancing rules.
The prices of lived-in homes have now declined 3.22 per cent after peaking in May. In April, they advanced 3.59 per cent over March.
Vincent Cheung, managing director of Vincorn Consulting and Appraisal, said buying sentiment continued to be hurt by the city’s ongoing anti-government protests. “There are so many uncertainties in front of us, and it is hard to come up with a full-year prediction,” he said, adding that home prices could fall 3 per cent to 6 per cent in the first two quarters of 2020.
Transactions for homes bigger than 160 square metres declined in November, falling for a fourth consecutive month as “investors held back their purchases because of market uncertainties”, Cheung said. There were less than 20 transactions for such units, according to government data. “Sales of large units have fallen below 20 deals only in December 2018,” he added.
“The market will be active again next month, if new projects generate a strong response,” said Ricacorp’s Chan.
Sun Hung Kai Properties, Hong Kong’s biggest developer by market value, will launch its Wetland Seasons Park residential project in Tin Shui Wai as early as Saturday. The developer had attracted more than 3,000 potential buyers for the 310 units on sale, going by the expressions of interest it gathered recently.