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Hong Kong home prices approach all-time high as analysts see headwinds toward year-end
- Prices of lived-in homes have risen by a cumulative 4.3 per cent in a seven-month rally to within all-time high set in May 2019
- Ricacorp expects the record to be broken later this year even as headwinds from stock market swoon and emigration wave loom
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Hong Kong’s home prices rose in July, approaching an all-time high, as property buyers gained confidence from signs of economic revival in the financial hub while the government stepped up efforts to contain the coronavirus pandemic.
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Prices of lived-in homes increased 0.5 per cent to 396.3 in July, according to an index published by the Rating and Valuation Department on Friday. They have rallied every month this year, for a cumulative 4.3 per cent advance. The index reached an all-time high of 396.9 in May 2019.
An index tracking rental prices rose 0.5 per cent in July, capping a 3 per cent jump in a five-month rally, the department added.
“It is now on the verge of breaking the record” despite the negative impact of a stock market slump, said Willy Liu, chief executive at Ricacorp Properties, who remains bullish on the outlook. “It should reach a new historic level in the third quarter.”
Hong Kong’s economy expanded 7.5 per cent in the second quarter, following a 7.9 per cent rebound in the preceding three months. Months of social stability helped shore up confidence, and homebuyers snapped up new units in fear of missing out on the rally, while big developers paid top dollar at government land tenders.
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Still, the speed of market recovery is slower than predicted, as some property analysts had previously expected the record to be broken by midyear. Part of the reason is the catastrophic slump in Chinese tech and education stocks amid China’s regulatory clampdowns.
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