Hong Kong house prices have climbed for 13 consecutive years

 Hong Kong house prices have climbed for 13 consecutive years

Despite continuously cooling down since September 2021, Hong Kong house prices have still increased for 13 consecutive years.

Data from the Hong Kong Rating and Evaluation Bureau showed that the housing index in December decreased by 0.3% to 392.5 points compared to the previous month. This index has dropped 1.4% from the peak (398.1 points) in September 2021. However, year-on-year, the index of December 2021 is still 3.3% higher than the same period last year.

The decline in house prices in December coincided with Hong Kong seeing the first signs of a fifth Covid-19 outbreak, after more than six months without cases.

Martin Wong, Director and Head of Research and Consulting for Greater China at Knight Frank, said: "As long as the Covid-19 situation doesn't get worse, we remain confident in the overall outlook for the housing market. live". The real estate consulting firm expects regular housing prices to increase by about 3% and 3-5% for the high-end segment in 2022.

Although Covid-19 has not yet affected real estate prices, Wong said, the market will undergo a correction in the next 1-2 months. This will cause the trading volume to decrease.

The increased number of infections has slowed the implementation of new projects because of social distancing measures. However, any new project is likely to sell out, Wong said.

Besides, the US Federal Reserve's interest rate hike also affects Hong Kong's real estate market. Accordingly, Mr. Wong noted that it is difficult for the city to keep up with this rate of interest rate increase due to local economic conditions.

"Real mortgage rates in Hong Kong over the next 12 months will remain below 2%, which is lower than rental yields. So it will encourage people to buy properties," he said.

Meanwhile, the house price index from the two leading real estate agents recorded a higher increase than the official government index in 2021. Accordingly, the Centa-City Leading index of Centaline (a company) which has tracked Hong Kong's housing market prices since 1993), secondary home prices rose 4.8% last year. Midland Property Price Index of Midland Holding recorded an increase of 4.97%.

Albert Wong, honorary advisor at AAHorses Mortgage Brokerage Services, said the downward price trend in the past quarter showed a new impetus in the real estate market. And house prices are likely to fall 20% over the next two years.

According to him, home buyers should consult government data, including all secondary transactions, as this accurately reflects price trends. "Buyers need not rush to make decisions just by consulting a number of indicators that can be subject to short-term volatility," he noted.