HK’s home prices gather speed in April, rise at the fastest pace in more than six years

01-Jun-2019 Intellasia | South China Morning Post | 6:00 AM Print This Post

Hong Kong’s pre-owned home prices rose at the fastest pace in more than six years, stretching a four-month rally, but analysts expect the uptrend to taper off as buying interest has been adversely hit by the escalating US-China trade war.

The price index of used homes rose 3.2 per cent to 390.5 in April, faster than the 3 per cent growth in March, according to data released by the Rating and Valuation Department on Friday.

The growth is the fastest for 74 months since February 2013, when a 3.23 per cent rise was recorded, said Derek Chan, head of research at Ricacorp Properties.

“The figure reflects the market before trade war escalated, when market sentiment was good,” said Chan. “Buyers entered the market enthusiastically so there was a large growth.”

Flats of less than 431 sq ft rose the fastest at 3.4 per cent. Among these relatively small flats, those in Kowloon on average had the highest growth at 4.6 per cent to HK$6.45 million.

Chan said the government was likely to monitor the market closely because in the past it has taken action whenever prices have risen more than 3 per cent for two straight months.

He expects the growth will slow down to less than 2 per cent in May amid souring market sentiment as the trade war continues.

“This time, the market is not as panicked and worried as it was the last time,” said Chan. “So there is no large scale price cutting to offload stock.”

Lee Shu-kam, associate head of the department of economics and finance at Shue Yan University, said home prices will remain volatile and could rise or fall up to 5 per cent because of the uncertainties surrounding the trade war.

He said that buyers have been scared after US President Donald Trump raised tariffs, which could result in prices falling in the summer when transactions decline because of people going on holiday. “The market will soon factor in these developments and home prices will rise again,” he said.

Both investors and end users have held back their purchases after losses on the stock market. The city’s benchmark Hang Seng Index has lost 8.5 per cent in May as of close on Thursday.

As a result, the mass market remains downbeat. Only 134 transactions were recorded in 10 major used private estates in May as of Wednesday, down 40.2 per cent month on month and the lowest this year.

Notably, sales of new homes have been disappointing for two straight weekends, with Maya by Nouvelle in Yau Tong selling just two flats out of 86 on offer last Saturday, as the trade war has made potential buyers hesitant.

https://sg.news.yahoo.com/hong-kong-home-prices-gather-030439284.html

 


Category: Hong Kong

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