Hong Kong House Prices Continue To Dip

January 22, 2016

NewsStandOnline.Net (22-January-2016): Home prices in Hong Kong rose steadily over the past decade. But they have started to dip since the latter part of 2015, and are expected to further decrease this year.

Data from Centaline Property showed that home prices in Hong Kong dropped 5 percent in the second half of 2015, and the slump has accelerated in 2016.

“In 2016, the prices continued their decreasing trend from last year. The recent economic data was not good, after the rate hike in the US, so the decrease is accelerating,” said Chen Yongjie, president, Centaline Asia-Pacifec.  “We estimate prices will touch bottom by Spring Festival, and drop by 10 to 15 percent.”

Hong Kong House Prices Continue To Dip

Chen is worried that the lower house prices will hurt the economy. But analysts say there’s a limited bubble in the Hong Kong’s property market, thanks to the local government’s tax measures to curb speculation.

“House prices in 2013 and 2014, especially those of middle and small sized ones, have increased 60 to 80 percent, some rose one time. So an adjustment of 15 to 20 percent is reasonable,” Chen said.

On the contrary, prices of luxury properties are selling well in Hong Kong. Besides there being a limited amount, which helps the properties keep their value, analysts say safe-haven flows are entering Hong Kong’s luxury property market.

“We can see that 30 percent of the luxury properties were bought by investors from the mainland. Local investors have also been buying properties recently,” said Li Wei, Centaline Asia-Pacific.

Analysts expect the home prices to become relatively stable after the Spring Festival, and sales may recover too. But with complicated global economic circumstances, fluctuations will still be seen in Hong Kong’s real estate market.