Hong Kong's Home Market Sees Rise in Losses, Hits 14-Year High

In the first quarter of the year, the Hong Kong housing market recorded 1,305 cases of paper losses, marking the highest number in 14 years. This surge occurred despite the government's removal of housing curbs at the end of February.

According to data from Ricacorp Properties, transactions that recorded losses accounted for approximately 29.7% of all secondary market deals during the quarter, an increase of 3.5 percentage points from the last quarter of the previous year. This proportion has risen for three consecutive quarters, reaching a peak not seen since 2009.

The increase in loss-making sales reflects a trend where more homeowners are eager to sell their properties quickly following the abolition of additional housing stamp duties seven weeks ago, explained Ricacorp.

In contrast, the number of break-even transactions stood at 31, representing a slight decrease to 0.7% of total sales. Meanwhile, profitable sales in the private housing market totaled 3,056 cases, yet this figure represents a decrease in the share of all secondary-market transactions, dropping to 69.6% from 72.9%.

This shift indicates a new 15-year low for profit-recording deals, suggesting a sluggish market and a structural change within the sector. Furthermore, the average profit from secondary-market home sales fell drastically to 29%, down from 35.4%, marking the lowest average gain in 14 years.

Particularly impacted are homes priced at HK$4 million or below, where only 64% of units sold recorded a paper gain, the lowest rate among all categories of private homes. This data underscores the ongoing challenges and adjustments in Hong Kong’s property market.