Property

Hong Kong’s Sky-High Property Prices

Hong Kong

According to data from real estate agents, Hong Kong home prices skyrocketed by 14% in 2017. Even though the interest rate in the U.S. is set to increase this year, industry experts believe that home prices in Hong Kong will still rise.

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In reality, transaction volumes bottomed out in 2017, however, it is expected to rebound back this year. Under the government’s stringent cooling measures, the primary market remained strong and it is believed that developers will push even further with new projects in 2018. It is forecasted that the total registrations in the combined first- and second-hand market will reach around 60,000 transactions, which is 3% more than of last year. Specifically, the number of transactions for first-hand private homes is expected to increase by 8%, reaching 20,000 transactions meanwhile a 0.5% growth is projected for the second-hand market to a total of 40,000 transactions.

Industry insiders anticipate that there will be two interest rate hikes this year, reaching between 2.4% and 2.65% by the end of 2018. It is believed that the interest rate hikes will have little effect on mortgage repayments on property owners that have taken out loans as monthly repayments will only increase by HK$128 for every HK$1 million.

With unemployment rate resting at a historical low and major industries like history, retail, tourism and export recovering, Hong Kong’s economy remains steady as purchasing power is still strong. The current home price is high but will it keep increasing next year? We will have to wait and see.

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