Analysis | A new normal: are the wild days of Hong Kong’s housing market a thing of the past?

Name: SCMP
Telephone: +852-2680-8888

Strong supply and elevated interest rates mean house prices are unlikely to return to the kind of breakneck growth seen in the past, analysts say

‘A healthy market is where there is supply, and property prices rise with inflation,’ says Donald Choi, CEO of Chinachem

Reading Time:5 minutes

Why you can trust SCMP

Some analysts expect to see Hong Kong’s housing markets settle into a new normal in which skyrocketing and often volatile home prices are a thing of the past. Illustration: Henry Wong

Salina Li

Published: 10:00am, 6 Apr 2024Updated: 12:10pm, 6 Apr 2024

On a Thursday afternoon in mid-March eager homeseekers crammed in to an office in Hong Kong’s Central district for an auction of foreclosed properties. Some of the houses found buyers before the auction officially got under way, such was the fervour.

Among the throng was Mable Mak, who snapped up three properties, in Tuen Mun, Jordan and Discovery Bay, for HK$13 million in total. She was motivated by the government’s decision to scrap all its decade-old property market restrictions with immediate effect at the end of February.

The measures withdrawn included stamp duties that targeted non-permanent residents and second-time buyers.

“I have already got a house under my name that I live in, but I didn’t think of buying a second one for investment until now because of the 15 per cent ad valorem stamp duty,” the 36-year-old permanent resident said.

13:00

How Hong Kong's housing market became among the world’s most unaffordable

Such curbs were originally introduced to cool excess market speculation that took hold in the early 2000s and drove home prices to eye-watering levels.

Their removal has made property a viable investment option once more at a time when Hong Kong’s stock market is not performing well, said Mak, who works in the beauty sector and has six years of experience investing in stocks and bonds.

Analysis | A new normal: are the wild days of Hong Kong’s housing market a thing of the past?

Strong supply and elevated interest rates mean house prices are unlikely to return to the kind of breakneck growth seen in the past, analysts say ‘A healthy market is where there is supply, and property prices rise with inflation,’ says Donald Choi, CEO of Chinachem

Strong supply and elevated interest rates mean house prices are unlikely to return to the kind of breakneck growth seen in the past, analysts say

‘A healthy market is where there is supply, and property prices rise with inflation,’ says Donald Choi, CEO of Chinachem