Hong Kong’s private home prices experienced a notable turnaround in March for the first time in 10 months, marking a 1.1 percent increase from February. The increase came following a decision to lift curbs to revitalize the sluggish property market.
According to official data, the increase in Hong Kong’s home prices follows a 1.7 percent decline in February. Notably, Hong Kong is one of the world’s most expensive property markets.
In Q1 of 2024, home prices saw a 1.8 percent decline after dropping 20 percent from their highest in 2021. The decline was due to several factors, including higher mortgage rates, an outflow of talent and a weak market outlook.
By the end of February, Hong Kong removed all additional stamp duties for foreign and second-home buyers. The decision also included those selling flats within two years of buying them. Following this decision, the property market saw a surge in transactions.
However, Hong Kong still expects home prices to remain low as property developers launch new sales at large discounts of up to 30 percent. This took the spotlight away from the secondary home market.
Read: U.S. luxury real estate sales rise over 2 percent as prices hit all-time highs
Realtor Cushman & Wakefield revealed that home prices have reached their lowest. However, recovery is unlikely due to rising economic uncertainties amid a high-interest rate environment.
The firm expects a recovery of 5 to 7 percent and a 40 percent recovery in transactions if the U.S. Federal Reserve cuts interest rates in the second half of the year. U.S. rate cuts impact Hong Kong since its currency is pegged to the dollar.
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