Hong Kong private home prices fell for the fourth consecutive month in January to the lowest since February 2021, according to official data released Thursday on Thursday as the financial city was hit by a new wave of COVID- 19 outbreak.
The prices decreased by 1.1 per cent last month, compared to a revised fall of 0.1 per cent in December. The month of January was the biggest in eleven months.
Hong Kong's property market is one of the world's most expensive and has stayed largely unaffected by the mass protests in the past two years and the pandemic in the past two years, supported by robust demand and lower interest rates.
Its home prices hit a new record high in September before it began to consolidate.
Some property agents lowered their full-year price forecast this month as coronaviruses surged in the Chinese-ruled city and the government rolled out some of the most stringent social restrictions in the world, affecting many businesses.
Hong Kong Property Services predicted prices to fall within 5 per cent in the first quarter, but rose 3 -- 5 per cent for the full year on a rebound after the pandemic stabilizes.
Dave Ma, Hong Kong Property Services chief operations officer, said that prices recovered after the last four waves of the outbreak. Compared to the first outbreak sellers are not slashing prices as much and transaction volumes are higher because people are looking for bargains. He said some sellers offloaded property below market price because their business was seriously affected by the Pandemic.
Property developers are delaying their new launches, leading to a plunge in new home transactions. The deal number expected by realtor Centaline in February to drop 18 per cent from January to a 24 month low.
As a boost to the property market, the government announced a relaxed rule to allow first-time buyers to borrow 80 per cent mortgage for homes transacted HK $12 million US $1.54 million and below, compared to HK $10 million and below, while 90 per cent for HK $10 million and below, compared to HK $8 million previously.
For transactions more expensive than HK $12 million, which is the mid- and large home market, buyers can only borrow up to 50 per cent.