In this March 11, 2022 photo, residential buildings are seen in Hong Kong. According to official data, the price of Demographia, the world's most unaffordable housing market, climbed 0.5 percent in April from the previous month, compared with a revised 0.6 percent fall in March.
Hong Kong's economy was hit earlier this year after social restrictions were imposed to deal with the latest COVID 19 outbreak. Real estate agents lowered their forecasts for 2022 because of the measures.
After months of muted activity, property developers launched new sales in April in response to the withdrawal of some COVID 19 restrictions, which caused over-subscribed demand from buyers that drove up both transaction volumes and prices.
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After prices fell by 3 percent in the first three months, some realtors expected they had bottomed, though others remained cautious.
Online property marketplace Spacious expected prices to drop another 5 percent in the rest of the year, citing a weaker local economy, a deteriorating mortgage rate outlook and the negative effect on personal wealth from weaker equity markets.
The property market would lose steam after the initial bounce in April and May, according to Spacious chief operating officer James Fisher. Fisher said that the bounce was boosted by the release of pent-up demand after the relaxation of restrictions and developer discounts in the primary market.
We think market pricing will deteriorate further over the next few months because developers continue to push new supply via discounts, and these headwinds remain.
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He said that asking prices in the secondary market continued to decline and overall buyer demand was weak, and he added that he said it was not clear how much buyer demand was in the secondary market.