Hong Kong home prices slip in December as gloomy outlook weighs

Into the new year, property agents expect prices to continue their downtrend until the second quarter, and transaction volumes to shrink due to a new coronavirus outbreak in China. PHOTO: AFP

HONG KONG (REUTERS) - Hong Kong private home prices eased again in December, weighed down by a gloomy economic outlook of the financial hub that was hit by a series of violent anti-government protests last year.

The monthly price index, in one of the world's least affordable property markets, declined 1.7 per cent last month, compared with November's revised 1.9 per cent gain, government data showed on Friday (Jan 31).

Home prices in Hong Kong snapped a five-month decline in November, supported by a jump in small flat transactions after the government relaxed mortgage rules.

Into the new year, property agents expect prices to continue their downtrend until the second quarter, and transaction volumes to shrink due to a new coronavirus outbreak in China.

"The housing market will continue to correct due to a worsening economy; with the virus now it may correct faster. The impact from the virus may reflect in February," said LS Wong, senior associate director of research at realtor Centaline, who expected prices to correct 10 per cent from the peak last year.

Over seven months of protests have evolved into a broader pro-democracy movement since they erupted in June last year in response to a now-withdrawn bill that would have allowed extraditions to mainland China, where courts are controlled by the Communist Party.

The property sector has been relatively resilient compared with tourism and retail sectors, which have been hit badly by the protests and the US-China trade dispute.

Hong Kong's home prices were still up 4.8 per cent for full year 2019, after sliding 4.6 per cent since May.

Property agents also expect more developers to delay launches, after Wheelock and Co said on Thursday it may delay its project as the city's home transactions plunged amid fears of the epidemic.

Join ST's Telegram channel here and get the latest breaking news delivered to you.