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Hong Kong home prices ‘likely back in a downtrend’ as slump resumes after ‘short-lived’ first-quarter recovery: Citi

  • Since the last week of March, the city has recorded fewer than 80 transactions per week, and in one case only 35, according to Midland Realty
  • As low volumes pressure owners, with some of them selling at a loss, Citi now expects overall prices to stay flat through 2023

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The Mountain Shore development in Ma On Shan, where one owner recently lost 5.4 per cent after selling a two-bedroom apartment for HK$7 million. Photo: Handout
Elise Makin Beijing

A first-quarter rally in Hong Kong’s home market turned out to be remarkably “short-lived”, as sales have now slumped and sellers are slashing prices to get deals done amid a “downward trend” that will last through the year, according to property agents and analysts.

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Since the last week of March, the city’s property market has recorded fewer than 80 transactions per week, and in one case only 35, according to Midland Realty data.
The downturn follows a 7 per cent increase in home prices in the first quarter, Ken Yeung, property analyst with Citi, wrote in a research note on Tuesday.

“Hong Kong residential transaction volumes have been weakening since March 23, which was quite a surprise to us how short-lived this round of recovery was,” he said.

Dragons Range in Kau To Shan, pictured in March 2016, where an owner recently slashed the price for a three-bedroom home by 16.8 per cent to HK$13.3 million. Photo: Jonathan Wong
Dragons Range in Kau To Shan, pictured in March 2016, where an owner recently slashed the price for a three-bedroom home by 16.8 per cent to HK$13.3 million. Photo: Jonathan Wong

Hong Kong home prices “are likely back in a downtrend” given that weekly transaction volume in the secondary market has been low for two consecutive months, he said.

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