{"id":6095588,"date":"2023-08-16T19:27:28","date_gmt":"2023-08-16T19:27:28","guid":{"rendered":"https:\/\/www.buyassociationgroup.com\/en-hk\/?p=6095588"},"modified":"2023-08-16T19:27:28","modified_gmt":"2023-08-16T19:27:28","slug":"house-prices-fall","status":"publish","type":"post","link":"https:\/\/www.buyassociationgroup.com\/en-hk\/news\/house-prices-fall\/","title":{"rendered":"House prices in Hong Kong continue to fall as sellers offer discounts"},"content":{"rendered":"

Despite a supply shortage in the Hong Kong property market, house prices have been falling as demand weakens, leading to larger gaps between asking price and sale price.\u00a0<\/strong><\/p>\n

The Hong Kong housing market is notoriously expensive, and the city’s prime property market is often listed as the most expensive in the world. The average prime residential property costs around US$4,110 per square foot (HK$32,186).<\/p>\n

While the luxury home market in Hong Kong registered an average 1.8% rise in house prices for the first half of 2023, the area’s property market as a whole appears to be heading in the other direction, according to analysts.<\/p>\n

Sellers trying to offload their properties now are being said to be cutting their prices by “at least 10% from what they were two months ago”, according to Louis Chan Wing-kit, CEO of the residential division at Centaline Property Agency<\/a>. This comes amid predictions that house prices are set to fall further.<\/p>\n

Others are reporting having to slash their expectations by as much as 28% in order to sell their properties, which can mean some are selling at a loss.<\/p>\n

House prices high but cooling<\/h4>\n

Hong Kong has long since experienced escalating house prices<\/a> due to a range of factors, and the government and the monetary authority introduced cooling measures back in 2010 to curb this growth. This included a series of new stamp duties, which served to deter non-residents, investors and multiple home owners.<\/p>\n

The measures certainly reduced property transactions, according to the figures, but they do not seem to have had the same effect on house prices, meaning Hong Kong still remains one of the world’s priciest markets. The latest cooldown could therefore be positive, depending on your position.<\/p>\n

One of the major issues affecting the property market, which is a similar situation to that being experienced in the UK at the moment, is the high interest rate environment. For some investors, this is creating negative market sentiment, as well as reduced affordability.<\/p>\n

Recently, the government raised its cap on the loan-to-value (LTV) ratio to 60%-70% from 50%, for properties worth up to HK$30m ($3.8m). While this created a surge of interest, so far it has not equated to more buyers, according to Louis Chan, Asia Pacific vice chairman of Centaline Property Agency.<\/p>\n

This is “because the economy is still not good”, said Chan, who added that three quarters of transactions are currently worth HK$10m or less, as there are a lot of small apartments in Hong Kong that are still popular, meaning the new measure would not help the majority of buyers.<\/p>\n

Mortgage rates creating pressure<\/h4>\n

Recent figures from the Hong Kong Monetary Authority revealed that mortgage arrears on properties that were in negative equity between April and June had increased to 0.09%, up from 0.04% in March.<\/p>\n

However, the actual number of cases of households being in negative equity, where the value of their borrowing exceeds the value of the property, has fallen. The end of June results show that there was a 46.7% drop compared to the previous quarter, with 3,341 borrowers now in negative equity.<\/p>\n

Like the UK, the monetary authority has been upping its base rate consistently over recent months, with 11 consecutive hikes in 17 months. After the latest rise, the Hong Kong dollar strengthened to 7.7951 per dollar, which is its strongest level in eight months.<\/p>\n

However, while Hong Kong’s monetary policy follows that of the US because Hong Kong’s currency is pegged to the US dollar, meaning its base rate action mirrors the US, banks and lenders are not obliged to do the same and can set rates based on supply and demand.<\/p>\n

Many of the banks’ best lending rates are now extremely high, though, compared to what they were two years ago, and unfortunately, analysts do not expect this scenario to ease any time soon, which means house prices could continue to be affected.<\/p>\n

HKMA\u2019s chief executive Eddie Yue Wai-man has said there could be more interest rate rises in the future: \u201cThe high-interest rate environment in the US may last for some time, and the Fed may hike rates again.<\/p>\n

“The interest rate path in the US will remain uncertain.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Despite a supply shortage in the Hong Kong property market, house prices have been falling as demand weakens, leading to larger gaps between asking price and sale price.\u00a0 The Hong Kong housing market is notoriously expensive, and the city’s prime property market is often listed as the most expensive in the world. The average prime… Read more »<\/a><\/p>\n","protected":false},"author":1069,"featured_media":6095605,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[26,141],"tags":[33,107,108],"acf":[],"_links":{"self":[{"href":"https:\/\/www.buyassociationgroup.com\/en-hk\/wp-json\/wp\/v2\/posts\/6095588"}],"collection":[{"href":"https:\/\/www.buyassociationgroup.com\/en-hk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.buyassociationgroup.com\/en-hk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-hk\/wp-json\/wp\/v2\/users\/1069"}],"replies":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-hk\/wp-json\/wp\/v2\/comments?post=6095588"}],"version-history":[{"count":5,"href":"https:\/\/www.buyassociationgroup.com\/en-hk\/wp-json\/wp\/v2\/posts\/6095588\/revisions"}],"predecessor-version":[{"id":6095606,"href":"https:\/\/www.buyassociationgroup.com\/en-hk\/wp-json\/wp\/v2\/posts\/6095588\/revisions\/6095606"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-hk\/wp-json\/wp\/v2\/media\/6095605"}],"wp:attachment":[{"href":"https:\/\/www.buyassociationgroup.com\/en-hk\/wp-json\/wp\/v2\/media?parent=6095588"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-hk\/wp-json\/wp\/v2\/categories?post=6095588"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-hk\/wp-json\/wp\/v2\/tags?post=6095588"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}