HONG KONG (REUTERS) – Hong Kong private home prices in February posted the biggest monthly decline since November 2018, falling 2.1 per cent as the coronavirus spread across the financial centre.
The monthly price decline in one of the world’s least-affordable property markets was the third in a row, after January’s revised 0.1 per cent drop, government data showed on Tuesday (March 31). The February price index was about the same level recorded a year ago.
The epidemic brought Hong Kong to a virtual standstill last month, keeping shoppers, office workers and even protesters off the streets. The Chinese-ruled city’s property market has already been hit by the anti-government protests in the second half of last year.
“The fall is within expectation; it started to reflect the impact from the epidemic,” said Thomas Lam, an executive director of Knight Frank, adding the fall would accelerate in the next one to two months.
Lam, who forecast home prices would drop 10 per cent for the full year, expected the property market to stabilize in the second half, while transaction volume would drop 20-30 per cent in the coming two months.
Transaction volumes in the secondary market recovered to a four-month high in March, as the epidemic was seemingly better contained in the first half of the month and flat hunters were back to look for bargains.
Despite the uptick in confirmed cases of Covid-19 recently, potential buyers and property agents do not expect a collapse in prices, given the strong pent-up demand and low interest rates.
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