Hong Kong home prices hit another record, but could face headwinds
Reuters
Published Jul 31, 2018 12:44AM ET
Hong Kong home prices hit another record, but could face headwinds
By Venus Wu
HONG KONG (Reuters) - Hong Kong private home prices hit another record in June and climbed over 10 percent in 2018's first-half, government data showed, but analysts said potential interest rate hikes and trade disputes could crimp increases over the rest of the year.
Any cooling in prices would be good news for the government, which has repeatedly vowed to make housing more affordable in a city often cited as the least affordable in the world.
Property prices rose 1.6 percent in June from May to break record levels for the 20th month in a row, according to an index compiled by the Rating and Valuation Department released on Tuesday. June prices were up 15.9 percent compared with a year earlier.
A 650-square-foot flat on Hong Kong Island would cost nearly HK$11.5 million ($1.47 million), according to calculations using June data from property agency Midland Realty.
But after a 27-month-long run of rising monthly prices, the longest such period in Hong Kong's history, analysts expect the red-hot market to ease over the rest of the year.
"The asking prices of some new projects are now less aggressive - a sign that developers are keen to boost sales," Cliff Tse, regional director of valuation advisory services at property consultancy JLL, said on Friday.
"Combined with worries about a trade war and a potential interest rate hike, house price growth in the second-half of the year will not be as brisk as the first-half."
While several property consultancies expect prices to edge up at a reduced pace, Citigroup (NYSE:C) Global Markets Asia projected a 7 percent drop in the second-half of 2018.
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Written By: Reuters
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