Hong Kong home prices remain flat in June after reaching two-year high
An index revealed the prices of second-hand homes remained at 394.5, slightly below the peak of 396.9 in May 2019
After reaching a two-year high, Hong Kong home prices became flat in June, as buyers take a breather after months of price rises stimulated by low-interest mortgage rates and a rebounding economy, reported South China Morning Post.
Data from the Ratings and Valuation Department shows that prices of second-hand homes stayed at 394.5, from the previous peak of 396.9 in May 2019.
Thomas Lam, executive director and head of valuation and advisory at Knight Frank, said, “This is quite normal after a few months of frenzied buying and prices have been rising, so this is something expected.”
Prices of flats measuring between 431 and 752 square feet increased 0.37 percent to 381.5, breaking the May 2019 record of 377.9.
Homes larger than 1,722 square feet experienced a value drop of 1.2 percent, while flats smaller than 413 square feet saw a decline of 0.45 percent during the period.
Moreover, the cost of home renting jumped for the fourth consecutive month in June to 177.9, up 0.06 percent from May. Rents have climbed 2.2 percent from a low in February but are 13 percent lower from a peak two years ago.
Buyers optimistically responded to the sales of new homes over the weekend, snapping up 16 percent of the 191 leftover apartments offered on Saturday, and half of the 79 units offered on Sunday.
The majority is comprised of small, one-bedroom flats suitable for first-time buyers. Older investors with deeper wallets had stayed on the sidelines, waiting for bigger launches in the upcoming months.
In Q1 2021, Hong Kong’s economy grew 7.9 percent, breaking six consecutive quarters of contraction as the city struggled with the impact of social unrest and the pandemic.
More: Hong Kong’s property sector rebounds with $60 billion worth of transactions
Various governments around the world have released stimulus packages to support their pummeled economies. Such packages and low-interest rates have raised property prices, as readily available cash found its way into asset classes including real estate.
“The property market continues to boom as the COVID-19 pandemic has been better managed, and that’s conducive to buyers’ desire to enter the market,” said Lam. “Residential property prices are likely to rise between five percent and eight percent this year.”
The Property Report editors wrote this article. For more information, email: [email protected].
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