Hong Kong home prices rise for 13th straight year, with rising trend likely to sustain if city brings fifth wave of Covid-19 outbreak under control

Hong Kong’s home prices rose for a 13th straight year in 2021 even as prices declined for a third consecutive month in December, according to an index published by the city’s Rating and Valuation Department.

The index for lived-in homes in December fell about 0.3 per cent to 392.5 from the previous month.

Since September, when the index reached a record high of 398.1, it has retreated 1.4 per cent. But on an annual basis, the December reading was 3.3 per cent higher compared with 379.9 a year earlier. The decline in December home prices coincided with the city starting to see the first signs of the fifth wave of the Covid-19 pandemic, after more than six months of nearly zero local cases.

“As long as the pandemic does not worsen further, we are confident of the overall residential property market,” said Martin Wong, director and head of research and consultancy for Greater China at Knight Frank. The property consultancy expects mass market residential prices to rise by as much as 3 per cent this year and luxury housing prices to increase by 3 to 5 per cent.

Although the pandemic has not had a big impact on property prices, Wong said the market will undergo a period of adjustment over the next month or two that will cause transaction volumes to fall.

The latest surge in infections in the city had slowed down the launch of new projects by developers because of the government’s social distancing measures, but any new launch was likely to be sold out, he said.