HONG KONG, Dec 29 (Reuters) – Private home prices in Hong Kong grew 0.9% month-on-month in November, the sixth month of increase in a row, government data showed on Monday, as interest rate cuts and a vibrant stock market supported sentiment.
BY THE NUMBERS
Home prices climbed 0.9% in November from October, following a revised 0.4% rise in the previous month, data from the Rating and Valuation Department showed.
Prices have risen 2.8% this year, turning around from an annual decline since 2021.
WHY IT’S IMPORTANT
Home prices in Hong Kong, one of the world’s least affordable cities, have tumbled nearly 30% from a 2021 peak, hurt by higher mortgage rates, a weak economic outlook and poor demand after many professionals left due to strict COVID curbs and new national security laws.
Authorities tried to prop up the sector – a core pillar of the economy – last year, removing curbs on property purchases and relaxing ratios on down payments, but housing demand has remained soft.
HERE’S SOME CONTEXT
Property developers have been selling new flats at discounted prices to boost sales, suppressing the second-hand market, which is reflected in the official price.
Major Hong Kong banks lowered interest rates in October, the fifth cut since September 2024, following a reduction by the U.S. Federal Reserve.
Hong Kong’s monetary policy moves in lockstep with the U.S. as the city’s currency is pegged to the greenback.
WHAT’S NEXT?
Analysts believe the Hong Kong home market is bottoming out with support from stable buying volume. They said prices next year would depend on the pace of rate cuts and the severity of Sino-U.S. trade tensions.
JPMorgan said in a report it expected Hong Kong home prices to rebound by another 5% by the end of 2026, while the key downside risk is a sharp stock market fall.
(Reporting by Clare Jim; Editing by Muralikumar Anantharaman)
Comments