Hong Kong property market sees lowest home prices since 2016

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27th February 2024 – (Hong Kong) In January, Hong Kong witnessed a decline in private home prices, reaching the lowest level since October 2016. The weakening market sentiment, coupled with high interest rates, has contributed to this downward trend. Furthermore, potential homebuyers are adopting a cautious approach, waiting to gauge the impact of possible property stamp duty reductions expected to be announced later this week.

Official data released on Tuesday revealed a 1.6 percent drop in home prices last month compared to the previous month. This marks the ninth consecutive monthly decline, following a revised 1.5 percent decrease in December.

The property market in Hong Kong, renowned for being one of the most expensive globally, has experienced a significant downturn. House prices have plummeted by 20 per cent since reaching their peak in 2021. Analysts further predict a potential decline of up to 10 percent throughout this year.

Anticipation is mounting as market participants eagerly await the government’s announcement regarding potential relaxation of property stamp duties in the upcoming 2024/25 budget, scheduled for release on Wednesday. Such measures are expected to be implemented in an effort to boost market sentiment and stimulate activity within the sector.

Martin Wong, the Head of Research and Consultancy for Greater China at Knight Frank, commented on the current situation, stating, “While the Policy Address in October eased some stamp duties, the impact was insufficient. The market clearly demands a ‘full elimination’ of additional stamp duties to restore confidence among potential buyers.”

Wong anticipates that home prices will stabilise in the second half of the year, following a projected decline of 3 to 5 percent during the first half.