Hong Kong home prices drop – ending bull run of 28 months as world’s priciest market reaches tipping point
First home-price declines in more than two years seen in August. Smallish flats on Hong Kong Island take a big hit; skittish owners offer deep discounts to unload properties.
Hong Kong’s prices of lived-in homes fell in August, marking their first decline since March 2016, as the US-China trade war, accelerated launches of new flats, and higher mortgage rates pushed the world’s most expensive residential property market to a tipping point.
The city’s Rating and Valuation Index, which tracks the prices of used homes, dropped by 0.6 point to 393.9 last month, from 394.2 a month earlier, according to data by the Rating and Valuation Department.
That ended a 28-month property bull run, where a decade of cheap money drove residents to seek better returns for their investments, sparking home prices to surge by as much as 45 per cent over the period.
For homes smaller than 430 square feet, those on Hong Kong Island had the biggest drop of about 2.5 per cent, to HK$17,232 (US$2,201) per square foot from HK$17,671 per square foot on average, according to data from the department.
“Home prices on Hong Kong Island, the prime location, tend to drop early and by a larger extent,” said Billy Mak, associate professor of finance and decision sciences at Baptist University. “Small homes in the New Territories, which are relatively cheap, remain in large demand.”
