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Hong Kong home prices rose 1.3% month-on-month, marking the sixth consecutive monthly gain and the strongest increase since March 2024, according to the Rating and Valuation Department. The property-price index has now turned positive for the year, up 1.1% since December. This follows a sharp 30% decline from the 2021 peak, driven by high mortgage rates and weak demand. Recent rate cuts by major banks and relaxed housing curbs have begun to stabilise the market. Analysts suggest prices may have reached a bottom, though recovery will hinge on further interest rate cuts and an easing of U.S.-China trade tensions.
Home prices in Hong Kong increased by 1.3% in the latest month compared with the prior month, according to figures from the Rating and Valuation Department. This marks the sixth straight month of gains for the city's private residential market. The department had earlier revised the previous month's rise to 0.2%. Advertisement
This monthly increase is the strongest recorded since around March 2024. The rise means the property-price index has moved into positive territory for the year, with an estimated 1.1% gain since December.
However, this uptick comes after a steep decline. From its 2021 peak, private home prices in Hong Kong had fallen by nearly 30%. The slump had been driven by higher mortgage rates, a weaker economic outlook and reduced demand, particularly as some professionals left the city.
In response to the downturn, authorities removed or relaxed several restrictions on property purchases and lowered the required down-payment ratios in the previous year. But despite those measures, demand remained weak in the resale market. Developers also responded to the weak demand by offering new flats at discounted prices, which in turn weighed on prices in the second-hand market and was reflected in the official data.
Another contributing factor to the recent improvement is the rate-cut action by major banks in Hong Kong in the month in question, following the lead of the Federal Reserve in the United States. Because Hong Kong's currency peg to the U.S. dollar limits its monetary-policy independence, local interest-rate decisions often mirror those of the U.S.
Looking ahead, analysts believe the market may be reaching a bottom, supported by stabilising buying volumes. They emphasise, however, that future movement in home prices will depend on how quickly interest rates are cut and the extent to which trade tensions between China and the United States ease.
Source Reuters
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