HONG KONG: Home prices in Hong Kong – already considered the world’s least affordable major city – rose for 13th consecutive months to an all-time high in April, according to the latest data released on Wednesday. The Rating and Valuation Department’s monthly home price index, which represents price movements in the used property market, rose 2.1 per cent to 327.4 from March’s 320.6. Year on year, Hong Kong home prices jumped 19.8 per cent, according to the data, but agents are now predicting them to ease, as lending restrictions start to bite. “Home price growth will slow in coming months as mortgage lending curbs could dampen buying desire,” said Thomas Lam, senior director at property consultancy Knight Frank. “The government has sent a signal that further cooling measures may be rolled out if home prices continue to rise.”
Transaction volume at Taikoo Shing in Quarry Bay – one of the most active trading housing estate in the city – dropped by half to 13 so far this month from 27 in April, said Terence Wong, a senior sales manager at Ricacorp Properties’ Taikoo Shing branch. A 690 square feet on lower floor of Fu Shan Mansion changed hands for HK$9.5 million, or HK$13,768 per square foot. The transaction price was below the HK$15,514 per sq ft to HK$17,600 per sq ft being achieved in May, he said. “The mortgage curbs coupled with ample supply of new flats put on sale have lured potential buyers away from secondary market,” said Wong. Under the tighter rules, loans for properties valued at less than HK$10 million are limited to 50 per cent of the total price for borrowers with outstanding mortgages, and 40 per cent for those exceeding HK$10 million.
Following the move, four of Hong Kong’s biggest banks raised their mortgage rates by 10 basis points to 1.4 percentage points above the city’s interbank offered rate, or Hibor. Average transaction volume in the secondary market fell below 4,000 deals per month, said Midland Realty. Sales have plunged about half from normal month of 8,000 deals in 2011 before government introduced cooling measures to rein the red hot market. For the period from January to May 26, the total number of transactions in the secondary market rose 56.2 per cent to 19,092 deals, it said. The total value amounted to HK$129 billion, up 93.3 per cent from the same period in 2016, it said. “The hefty increase mainly because the depressed market in the first half in 2016,” said Buggle Lau, chief analyst at Midland Realty.
