Hong Kong October home prices drop 2.4%, biggest fall in 4 years

Rising mortgage costs and a bleak economic outlook have deepened pessimism among home owners. PHOTO: AFP

HONG KONG - Hong Kong private home prices fell 2.4 per cent in October, the biggest drop since November 2018, official data showed on Monday, dragged down by worsening market sentiment amid a pessimistic economic outlook.

The drop in home prices last month in one of the world’s most unaffordable housing markets followed a revised 2.1 per cent fall in September.

Home prices in the financial hub have fallen 10.5 per cent in the first 10 months of 2022.

The property price index was at 352.4 in October, the lowest level since December 2017.

Rising mortgage costs and a bleak economic outlook have deepened pessimism among home owners, while home prices for the full year are expected to drop around 10 per cent, the first fall since 2008.

Mr Martin Wong, head of research and consultancy for Greater China at Knight Frank, said he expects prices to fall 15 per cent for the full year, and transaction volumes to slip 40 per cent from last year to the lowest since 1997.

Interest rates in Hong Kong have climbed as the city has moved alongside the United States Federal Reserve, due to a currency peg with the greenback.

HSBC Holdings has hiked its best lending rate to 5.375 per cent from 5 per cent, and the floating interbank rate has also surged. However, home owners are protected by a price cap and interest rates are still low compared with those in the early 2000s. REUTERS

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