The public reflects the trend of bank valuation situation of the Centaline Valuation Index (major banks) CVI fell again to below 30 points, coupled with a succession of new property price reductions and promotions, predicted that property prices will continue to fall.
According to Hong Kong Wen Wei Po tracking the valuation of the top ten housing estates, almost all of them fell on a monthly basis. The biggest drop for the North Point and the rich centre of large units, valuation fell 3% month-on-month, believed to be the lack of acceptance of large units recently led to price falls, the other housing estates, such as Mei Foo Sun Chuen, Kwun Tong, Laguna City, Ngau Tau Kok Amoy Gardens, YOHO Town in Yuen Long and Tin Shui Wai Kingswood Villas have recorded a drop of 2% or more.
If we compare the earlier valuation trend, the valuation of the top ten housing estates in July compared to March fell by an average of about 3% to 4% level, while in March compared to November last year rose by an average of about 7.5%, the trend reflects that property prices rose briefly after a mini-sunrise at the beginning of the year, but since the first half of the United States to start the pace of interest rate hikes, property prices have begun to turn downwards, valuation trend since March also fell, and eat into the beginning of the year rise.
Hong Kong Property Agency Ng Chi-fai said, Mei Foo Sun Chuen in the first half of August, six transactions, including one estate property accumulated $3.45 million (about 31.9%) of the case. Sale and purchase from the sixth phase of 36 Lan Sau Road, low-floor flat A, an area of 689 square feet, the principle of large 2-room look inside the street view, the unit estate contractor as early as October 2021 to 10.8 million in the market, to the recent quiet market conditions, and finally reduced to 7.35 million sold, foot price of $ 10,668, the cumulative reduction of up to $ 3.45 million, in other words, called the price of 70% off the sale.
Ng Chi Fai added that the transaction price is about 6% lower than the market price. Based on the online valuation of $8.55 million by a major bank, the transaction price is 14% lower than the bank's valuation, reflecting the lag between the bank's valuation and the actual property price changes. Wu Zhihui also pointed out that the valuation of housing estates has continued to fall in recent months, and the current valuation has dropped by an average of 3% compared with two months ago.
Some market participants estimate that, in the United States to start the interest rate hike, the second-hand transactions were stagnant, property prices remain flat or negative state, but recently there are developers "fast to beat the slow", with low water prices to open all the market to absorb the purchasing power, to break the stifling of the market. Other developers who have hoarded more supply of new flats will have to reduce prices substantially to keep up with the pace of their sales, and secondary property prices in other districts will definitely be affected. It is expected that the effect of the price cuts on new flats will be reflected in the valuation later on.
In fact, the index for measuring bank valuations has also dropped further. According to Yang Ming-yi, Senior Associate Director of Centaline Property Research, the latest Centaline Valuation Index (Major Banks) CVI was 28.62 points last week, a drop of 3.81 points from last week's 32.43 points. The low price of new flats in Yau Tong has frozen the secondary market, resulting in fewer transactions, and banks have become more cautious and conservative in their mortgage valuation, which has caused the CVI to fall back to below 30 points again, ending a 2-week streak of gains.
Yeung also pointed out that the CVI has been below the lower limit of the 40-point positive/negative demarcation zone for 10 consecutive weeks, and has been fluctuating around 30 points. The downward adjustment in property prices is expected to continue, but there is no sign of a major drop for the time being. Recently, developers have been selling new flats at low prices, and the secondary property market has been under pressure, so it is worth paying close attention to whether the CVI will drop further to the 20-point level.
Since the outbreak of the banking crisis in the United States in March, coupled with the uncertainty of the local economic outlook, the CVI has gradually dropped from a high of over 90 points to around 30 points, with a clear downward trend, reflecting that Hong Kong's banks are actively controlling the risk of borrowing, and the mortgage taking attitude has continued to cool down. In June, the CVI fell below the 50-point good/bad dividing line and the lower limit of the 40-point good/bad dividing range, while in July and August, the index remained at around 30 points, confirming the downward adjustment of the property market.
Yang Ming-yi mentioned that a similar situation occurred in April 2019 when the CVI dropped steadily from above 90 points. At that time, the CVI fell steadily from over 90 points, while property prices changed from a series of rises and record highs to upward movements, and when the CVI fell into the 40 to 60 point good/bad demarcation zone, property prices were also struggling at the high level during the same period.
