‘Race to the bottom’: Hong Kong home prices slump to multi-year lows as deal volume slides

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Home transactions plummeted more than 30 per cent in June, official figures show, as JLL says lacklustre sales are weighing on prices

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Potential buyers look at a model showing Henderson Land’s Hung Hom residential project The Haddon at a property sales office in Tsim Sha Tsui, Hong Kong, on June 11, 2024. Photo: May Tse

Cheryl ArcibalandSalina Li

Published: 8:00am, 3 Jul 2024Updated: 3:44pm, 3 Jul 2024

Hong Kong home transactions plummeted more than 30 per cent in June, according to the latest official figures. And the lacklustre sales are weighing on prices, with recent new-unit launches selling poorly despite decade-low prices and prices of lived-in flats skidding to a nearly eight-year low, according to JLL.

Although the trend varies among the city’s districts, several new developments have hit the market with prices more than 10 per cent below those of similar projects in 2015, the property consultancy said in its latest report. Worse yet, sell-through rates have failed to impress despite the discounts.

“Hong Kong home prices have been on a race to the bottom in the last four to eight weeks,” said Cathie Chung, senior director of research at JLL in Hong Kong.

The latest official statistics on property deals underscore the lethargy afflicting the market.

Transactions of residential units fell 30.5 per cent month on month to 3,856 in June, with sales value shrinking by 35 per cent to HK$34.5 billion (US$4.4 billion), according to data released by the Land Registry on Wednesday. The drop follows a 35 per cent decline in residential transactions in May, compared with April.

Overall property transactions – including shops, car parks, industrial spaces and office units in addition to homes – dropped 28.7 per cent month on month to 5,245 units in June, with total value sliding 34 per cent to about HK$42 billion. Overall sales volume contracted by 25 per cent in May.

The figures confirm that enthusiasm over the lifting of property cooling restrictions in February dissipated after two months of improving sales in March and April.