Hong Kong home prices drop 2.1% in Sept, down 8% this year

HONG KONG : Hong Kong private home prices fell 2.1 per cent in September from a month earlier to the lowest since January 2019, official data showed on Thursday, dragged down by rising interest rates and a pessimistic economic outlook.

The drop in home prices last month in one of the world's most unaffordable housing markets followed a revised 1.9 per cent fall in August.

The property price index was at 362.1 in September, down 9 per cent from an all-time peak of 398.1 in September last year. Home prices in the financial hub have fallen 8.1 per cent in the first nine months of this year.

Hong Kong banks raised their best lending rate by 12.5 basis points last month, the first rate hike in four years.

Rising mortgage costs and a bleak economic outlook have deepened pessimism among homeowners, while home prices for the full-year are expected to drop around 10 per cent, the first fall since 2008.

Martin Wong, real estate consultancy Knight Frank Greater China head of research and consultancy, said he expects prices to continue to trend down in the short term, partly hurt by a stock market rout that pushed the main Hang Seng Index to its lowest since April 2009 this week.

Transaction volumes were set to fall to a nine-year low for the full year, he added.