Hong Kong’s residential market takes a dip, marking lowest point in over six years

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28th November 2023 – (Hong Kong) October witnessed a 2.16% reduction in Hong Kong’s residential property prices, bringing the official index to its lowest ebb in more than six and a half years. This plunge coincided with the fewest property transactions recorded this year.

Tuesday’s data release revealed that the Rating and Valuation Department’s index for lived-in home prices dropped to 321.4 from 328.5 in September. This figure is only marginally higher than the 321.2 recorded in March 2017.

As we approach the end of the year, it’s evident that second-hand home prices have declined by roughly 4%. This represents a 19% drop from the index’s peak of 398.1 in September 2021. The decrease in October, however, was less steep than September’s 2.4% fall, which marked the year’s most significant monthly drop.

As of Monday, 33,767 second-hand homes have been sold this year, compared with 36,974 in 2022, as per data compiled by Midland Realty. The month of October saw the sale of 1,917 lived-in homes, the lowest monthly total this year. November’s second-hand home sales are not expected to show significant improvement, with only 1,855 units sold thus far.

Meanwhile, developers have sold 9,562 new units this year, compared to 10,243 in 2022, as indicated by Midland Realty’s data.

In his second policy address, Chief Executive John Lee announced a relaxation of property restrictions last month. Measures included cutting the buyers’ stamp duty by half to 7.5% for non-permanent residents and residents purchasing a second or additional home. Furthermore, the special stamp duty of 10% was waived for homeowners who resell their property after two years, down from the previous three-year requirement.

Overseas talent meeting eligibility criteria are also exempt from paying stamp duty on property purchases, provided they attain permanent resident status.