© Reuters. FILE PHOTO: A general view of the construction site for housing buildings in Hong Kong, China October 24, 2023. REUTERS/Tyrone Siu/File Photo
HONG KONG (Reuters) – Hong Kong private home prices fell for the tenth month in a row to the lowest since September 2016 in February, and they are expected to remain suppressed even after the government recently removed the decade-long curbs for the property market.
Home prices in one of the world’s most expensive property markets dropped 1.7% in February from the previous month, official data showed on Tuesday, following a revised 1.2% fall in January.
In late February, Hong Kong removed all additional stamp duties for foreign and second home buyers, as well as on those selling flats within two years of buying them, in a bid to boost the city’s depressed real estate market and the property market immediately celebrated with a jump in transactions.
Mainland Chinese are also snapping up homes in Hong Kong, accounting for up to a third of new property sales, property developers and agents said, after a pandemic-induced lull spanning more than three years.
For primary sales of luxury residential properties worth more than HK$30 million ($3.84 million), the percentage was even higher, accounting for around 70%, JLL said on Monday, rebounding from less than 50% before the curbs removal. The realtor expected mainland Chinese buyers to remain active.
Housing prices have plunged more than 20% from their 2021 peak due to higher mortgage rates, an outflow of talent and a weak market outlook.
Even though sales have risen, analysts expect prices to remain suppressed as developers offer discounts to clear inventory. S&P Global Ratings estimated transaction volumes this year will recover only moderately from 2023, as interest rates remain high.
($1 = 7.8220 Hong Kong dollars)
