Hong Kong home prices slump to the lowest level in 8 years, but rents rise

Name: SCMP
Telephone: +852-2680-8888

Secondary home prices fell 1.7 per cent in September, while rents rose 0.1 per cent month on month

Reading Time:2 minutes

Why you can trust SCMP

Homes listed for sale are displayed outside a property agency in Hong Kong. Photo: Eugene Lee

Cheryl Arcibal

Published: 12:00pm, 29 Oct 2024Updated: 4:20pm, 29 Oct 2024

Hong Kong’s lived-in home prices fell by about 1.7 per cent in September to their lowest level since August 2016, as the impact of interest-rate cuts has yet to filter through to the faltering property sector, according to the latest official data.

Home prices fell for a fifth straight month, taking the 12-month decline to 12.5 per cent, according to data from the Rating and Valuation Department on Tuesday. Prices have slumped 7.5 per cent so far this year.

Since hitting an all-time high in September 2021, home prices have retreated by about 28 per cent.

Meanwhile, home rents continued to increase, rising by 0.1 per cent month on month and 5.8 per cent year on year. Rents have risen by about 5.4 per cent this year. The current rental index reading of 196 is just four points shy of the 200.1 peak recorded in September 2019.

The latest home prices and rents only partially reflect the rate cut initiated by the Hong Kong Monetary Authority (HKMA) on September 19. This was followed by the easing of mortgage financing requirements, raising the loan borrowing limit and increasing the debt servicing ratio to 50 per cent from 40 per cent for all properties.

The stimulus measures appear to be taking effect, with new projects getting a good response from homebuyers. On Sunday, all 198 units in Echo House, a joint venture between Chinachem Group and Urban Renewal Authority in Cheung Sha Wan, were fully sold out on the day of the launch.