An ebbing Covid-19 wave in Hong Kong has slowed the decline in prices of private homes in March in the world’s most unaffordable housing market, data showed on Wednesday.
Prices were 0.7% lower in March than in the previous month, according to the data, when compared with a revised monthly decline of 2% seen in February.
Private home prices have fallen 3.2% so far this year to the lowest level since December 2020, driven down by the economic effect of some of the world’s most stringent social restrictions for fighting Covid-19.
The government measures have also prompted real estate agents to lower forecasts for the rest of 2022.
Nonetheless, realtors estimate the housing market has bottomed, with prices and transaction volumes trending up this month. Property developers are rushing to launch new sales in response to the withdrawal of some social restrictions, taking effect this month.
Presales of Grand Mayfair I, a development in the New Territories, received 25 times over-subscription for 388 units on offer, local media reported. It is being developed by Sino Land, Wah International Holdings and China Overseas Land & Investment.
Major developer Sun Hung Kai Properties (SHKP) said last week it planned to launch new sales in around six developments this quarter and next.
“The property market will likely … see a relatively strong bounce in third and fourth quarter. [We] expect it will post a 5-10% gain for the full year,” said SHKP deputy managing director Victor Lui.
Hong Kong Property said its survey in mid-April showed 36.2% of the respondents were optimistic about the property market in the next 12 months, rising from 28.4% three months earlier, while those who felt pessimistic dropped to 33.7% from 42.3%.
Shortage of land is the main factor behind Hong Kong’s housing prices, which survey company Demographia ranks as the world’s highest.
An 80-square-metre (860-square-foot) apartment on Hong Kong Island costs about HK$16 million ($2.1 million), according to the latest data.
- Reuters with additional editing by Sean OMeara