Hong Kong property
Rental index also falls for the first time since November 2016
PUBLISHED : Wednesday, 28 February, 2018, 11:47am
Hong Kong’s secondary home price growth eased and rents declined in January, coming at a time when close to 32,000 new flats are expected to be available for pre-sale this year.
The home price index increased 1.27 per cent to 357.5, according to data released by the Rating and Valuation Department on Wednesday. This compared with a rise of 1.52 per cent in December.
Prices for flats smaller than 430 square feet dropped at the fastest pace last month, at 1.42 per cent.
The rental index for January fell 0.32 per cent to 186.5 last month, the first time since November, 2016, the government data showed.
“Slower growth pace is inevitable as flat prices have risen sharply in the past 22 months,” said Derek Chan, the head of research at Ricacorp Properties.
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Still, Hong Kong home prices set a record in January for 15th consecutive months of increase, the longest stretch of gains since 1993.
Chan said about 32,000 new units are likely to go on sale this year.
“Developers have been waiting for today’s Budget speech to see if further cooling measures will be introduced. If there are none, developers will speed up their project launches and the primary residential market will become active again,” he said.
Slower growth pace is inevitable as flat prices have risen sharply in the past 22 months
DEREK CHAN, RICACORP
Less than an hour after Financial Secretary Paul Chan delivered his budget, Empire Group Holdings and Lai Sun Group released three houses and two apartments at Alto Residences in Tseung Kwan O for tender.
Houses No 6, 15 and 20, with floor areas ranging from 2,244 square feet to 3,515 sq ft, will come with a garden, parking spaces, roof and flat roof.
No price list was disclosed but the previous highest selling price was HK$39,000 per sq ft in the district.
Last year, sales of new flats reached a 10-year high with 19,481 deals, while total value amounted to a record HK$245 billion
“Sales and value in the primary market may smash the previous record in 2018,” said Ricacorp’s Chan.
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He also expected the imminent rise in US interest rates to have little impact on Hong Kong home prices.
“Mortgage rates may only increase by 1 to 2 per cent, which will not affect home buying interest,” he said.
Morgan Stanley forecast Hong Kong home prices would remain flat this year.
“In the first half this year, we see developers achieving high average selling prices and strong sell through rate for projects driving positive sentiment. This could result in property prices rising by 5 per cent,” according to the bank’s report on Hong Kong property market outlook.
But “we see several headwinds developing, resulting in property prices declining by 5 per cent in second half”, it said.
Louis Chan Wing-kit, the Asia- Pacific vice-chairman and chief executive of the residential division at Centaline Property Agency, however, expected used home prices to continue rising this year.
“Hong Kong people intend to invest in real estate, with the Hong Kong dollar weakening against other major currencies,” he said. “Buying property during a market boom is one of the alternatives to protect ones wealth.”
This article appeared in the South China Morning Post print edition as: Home price growth pace eases in January