Expect home price deflation of 5 per cent among major Hong Kong housing estates in latest quarterly data, Midland says

Home prices at major housing estates are on track for a 5 per cent decline in the current quarter, reversing a rising trend that had seen prices increase by double digits in the first half of the year, according to Midland Holdings, the city’s only listed property agency.

Midland chairman Freddie Wong Kin-yip said data for the quarter ended September was likely to reveal a new downtrend in prices amid growing economic and financial headwinds. He made the remarks at a media briefing before the company announced its interim results on Wednesday.

“Hong Kong home prices have risen about 12.2 per cent in the first half of the year,” he said. “Faced with all the headwinds, it will cool down and lose growth momentum after peaking.”

He added that a rush by developers to unload new flats at prices close to those in the secondary market had been a factor in the softening market.

“Developers sped up flat sales and set prices that are closer to used homes, causing a plunge in home prices,” he said.

Wong also noted that veteran investors such as property tycoon Tang Shing-bor have begun selling down their investment portfolios.

He added that local banks would come under pressure to increase their prime lending rate next month. Among other negative factors, Wong cited the decline in the value of the yuan, an unwinding of quantitative easing among central banks, and the growing fallout from the deepening trade dispute between the US and China.