Hong Kong home prices ease for 2nd month after record high

FILE PHOTO: Choi Hung Estate in Hong Kong
FILE PHOTO: An aerial view shows Choi Hung public housing estate and other residential buildings with the Lion Rock peak in the background, in Hong Kong, China June 3, 2021. REUTERS/Joyce Zhou

November 26, 2021

HONG KONG (Reuters) – Hong Kong private home prices, among the most expensive in the world, dropped for the second consecutive month in October, official data showed on Friday, softening from a record high as potential buyers turned more cautious before a policy meet.

The prices eased 0.9% in October from September, compared to a revised 0.03% fall in September.

Home prices had risen for eight months before that to hit historical highs, levels that were last seen in May 2019 before the pandemic and anti-government mass protests in the city.

Property agents said buyers turned more cautious before the policy address delivered in October, worried that some drastic housing policy would be introduced to curb the sky-high property prices.

But after little substantial was announced, buyers became active again, with transaction volume in November increasing up to 40%, they added.

At the centre of plans to tackle the city’s housing shortage announced by leader Carrie Lam last month was a long-term goal to build a Northern Metropolis on the border with the mainland’s technology hub of Shenzhen, covering 300 square kilometres.

“Afterall, supply is still limited in Hong Kong, and the economic and employment recovery has helped to support the property market,” said Derek Chan, head of research at realtor Ricacorp.

He expected November home prices would be flat or post a small gain, and the gain may extend in December if the border with mainland China reopens.

Investors have been envisioning a much delayed reopen of border will boost local economy and property demand. Local media reported the reopening could likely to come in early December but the Hong Kong government has not given a precise timing.

(Reporting by Clare Jim; Editing by Shailesh Kuber)