HK private home prices climb to 20-month high on strong demand

HONG KONG • Hong Kong's private home prices, among the world's least affordable, climbed last month to their highest level since July 2019, official data showed yesterday, supported by robust demand and a recovering economy.

Prices were up for the third month in a row last month, rising 0.8 per cent, according to the data, compared with a revised 0.86 per cent increase in February.

Last month's price index stood at 388.3, 2.2 per cent lower than the historical high of 396.9 in May 2019.

Hong Kong's residential property market, which has a serious supply shortage, remained resilient last year, despite the pandemic and sometimes violent anti-government protests that started in the summer of 2019.

A report from think-tanks Urban Reform Institute and Frontier Centre for Public Policy ranked Hong Kong the world's least affordable housing market for the 11th straight year last year, based on median property prices and household incomes.

Property agent Centaline said transaction volumes in the secondary market this month were expected to be the highest in eight years, with values at a 23-year high.

Sentiment in the market started improving early this year, thanks to new vaccines, and buyers expect home prices to pick up after borders reopen with China.

Mainland Chinese bought 40 per cent more residential properties in Hong Kong in the first two months of this year, compared with a year ago, according to realtor Midland.

More than 80 per cent of their purchases this year were valued above HK$50 million (S$8.5 million), Midland said. But some property agents said high unemployment would weigh on the market in the midterm.

REUTERS

Increase in percentage of Hong Kong homes bought by mainland Chinese in the first two months of this year.

Proportion of property purchases by mainland Chinese this year valued above HK$50 million (S$8.5 million).