Hong Kong home prices in Nov hit record high for 7th straight month

Hong Kong's home prices hit a record high for a seventh consecutive month in November as pent-up demand for smaller units continued to boost sales. -- PHOTO:REUTERS
Hong Kong's home prices hit a record high for a seventh consecutive month in November as pent-up demand for smaller units continued to boost sales. -- PHOTO:REUTERS

HONG KONG (REUTERS) - Hong Kong's home prices hit a record high for a seventh consecutive month in November, official data showed, as pent-up demand for smaller units continued to boost sales in one of the world's most expensive property markets.

An index of overall private home prices for November edged up 3.7 percentage points month on month to 274 points. It was the index's eight straight monthly gain.

Home prices rose 12 per cent in the first 11 months of 2014, according to government data.

The data came days after the city's largest developer, Sun Hung Kai Properties, sold 300 small and medium-sized units within nine hours of their launch. The developer said units were sold at between HK$4 million (S$690,000) to HK$7 million (S$1.21 million), a discount of up of 10.5 per cent from the stated price.

As developers continued to offer discounts to attract buyers who are exempted from a series of cooling measures aimed at pricking the city's property bubble, analysts expect pent-up demand to keep boosting sales in 2015.

Developers will keep giving discounts and incentives and that will "continue to capture the end-user demand", said Ms Joanne Lee, research manager at property consultancy Colliers International in Hong Kong.

She forecast that home prices will edge up 3-5 per cent in 2015.

Hong Kong's overall property sales fell to a 17-year low in 2013, partly because of the cooling steps taken by authorities.

In late 2009, the government of the former British colony unveiled the first of a series of measures to cool one of the world's most expensive real estate markets, including the doubling of stamp duty on residential transactions to as much as 8.5 percent of the sale value.

Centaline Property Agency said the total value of 2014 transactions for Hong Kong private new homes was the highest since it started keeping records on them in 1996. Steep discounts attracted buyers once turned off by the sales tax, it said.

The Centa-City Leading Index, a widely used indicator of the city's residential price trends, is now at a record 132. That's 11 per cent higher than a year ago.

Hong Kong home prices have surged about 120 per cent since 2008 due to low interest rates, a supply shortage and flush liquidity.