The Hong Kong property market has long been a subject of attention, and recent data shows a continuous 7-month decline in housing prices, marking the longest downward trend in nearly 30 years.
According to the latest data released by the Rating and Valuation Department, the overall private residential price index for November is 316, a 6.56% decrease compared to the same period last year, with a cumulative decline of 10.78%.
This trend is reflected in different categories of units. Class B units with a practical area of 431 to 752 square feet experienced a monthly decline of 2.04% in the price index, continuing the downward trend. Class E units with a practical area of 1722 square feet or above saw a 1.74% decrease in the price index compared to October, the smallest decline among the five classes. The latest index is 5.73% lower than in December of the previous year.
Meanwhile, the rental index shows a trend diverging from property prices. The overall private residential rental index for November is 186.8, nearing the highest level in 4 years, with a monthly increase of 0.65% and an annual increase of 5.9%. This suggests that the rental market remains relatively active, and the decline in property prices has not had a significant impact on rents.
The reasons for the decline in the property market are attributed to the impact of government regulatory policies, such as increased stamp duties and restricted loan amounts, as well as changes in market supply and demand dynamics. With the continuous listing of new properties, the supply of housing has increased, but demand from buyers has not correspondingly risen, leading to a decrease in prices.
Opinions on the future direction of the property market vary among industry experts. Some believe that the government's easing of property market regulatory policies and factors like the temporary pause in U.S. interest rate hikes will have a positive impact on the property market and may alleviate the downward trend in prices. However, others predict that the continuous low-price offerings of new properties have put immense pressure on existing homeowners, and the overall private residential price index may continue to decline.
Wong Siu-kai, Director and Head of Research and Consultancy for Greater China at Colliers, pointed out that although the Policy Address announced a series of measures to ease property market regulations, it will take longer for purchasing power to be released, and the market lacks confidence in the short term. He predicts a 6% to 7% decline in property prices for the whole year, with the possibility of a further 3% to 5% decline in the first half of next year. Regardless, the changes in the property market will have profound effects on Hong Kong's economy and finance, and close attention is warranted.