Hong Kong March home prices up 1.1%

After the financial hub loosened restrictions to support the faltering real estate industry, Hong Kong's private home prices rebounded in March, breaking a 10-month downward trend and rising 1.1% from February.

The increase in home prices in one of the world's most expensive property markets followed a revised 1.7% fall in February, official data showed on Friday.

For the first quarter, prices dropped 1.8%, after plunging 20% from their 2021 peak due to higher mortgage rates, an outflow of talent and a weak market outlook.

In late February, Hong Kong removed all additional stamp duties for foreign and second home buyers, as well as on those selling flats within two years of buying them, and the property market immediately celebrated with a jump in transactions.

However, prices are expected to remain suppressed as property developers rushed to launch new sales at steep discounts of up to 30%, and that drew much of the buying interest from the secondary home market.

Realtor Cushman & Wakefield said housing prices have bottomed, but a significant rebound is unlikely due to economic uncertainties amid a high interest rate environment.

It forecast a rebound of 5-7% in prices if the U.S. Federal Reserve cuts interest rates in the second half, which Hong Kong banks could track as the currency is pegged to the dollar, and up to a 40% rebound in transactions for the full year.

According to a survey released this week by realtor Ricacorp, 30% of deals involving second-hand properties resulted in a loss, and the company predicted that this trend would persist in the upcoming quarter.