Hong Kong’s January lived-in home prices rise, reversing three months of decline as property buyers return to the market

The price index for lived-in property rose by 0.13 per cent to 380 in January, the first monthly increase since September, according to data provided by the Rating and Valuation Department

Smaller flats were more popular among buyers, with the price index rising 1.2 per cent last month from December. The index for bigger apartments eased by 0.2 per cent

Reading Time:3 minutes

The pickup in second-hand home prices points to a more positive outlook for the world’s most expensive real estate market. Photo: Felix Wong

Published: 5:00pm, 24 Feb 2021Updated: 5:23pm, 24 Feb 2021

Prices of lived-in homes rose last month in Hong Kong, ending three straight months of decline, as buyers were encouraged by the city’s tapering coronavirus caseload to return to the property market, confident that the local economy would bounce back from its recession.

The price index for lived-in property rose by 0.13 per cent to 380 in January, the first monthly increase since September, according to data provided by the Rating and Valuation Department. The index was still down by 16.9 percentage points, or by 4.3 per cent, from the record high of May 2019.

“More property buyers revived their buying interest last month after seeing the number of daily new infections fall to double digits,” said Derek Chan, head of research at Ricacorp Properties. “It helps to stabilise home prices.”

The pickup in second-hand home prices, although a lagging indicator, points to a more positive outlook for the world’s most expensive real estate market, as developers grapple with how and when to offload 31,000 new homes – nearly 80 per cent more than the annual take-up rate in the past five years – in the coming months. Chinachem Group, the first developer to kick off a new property sales launch in the Year of the Ox, managed to find buyers for just three of its 52 Mount Anderson flats in Kwun Tong yesterday, which underscores the market’s trepidation.

The expected deluge of new homes is spoiling buyers with available choices, causing them to be more selective in their commitments, Chan said.

A family in the city would need to save up for 20.7 years to afford a home, according to the annual Demographia International Housing Affordability Study in 2021, which ranks 92 major markets across the world based on median affordability scores. That has changed slightly better than 20.8 years in 2020 and 20.9 years in 2019.