In November, official data showed on Wednesday that the price of private houses in Hong Kong dropped 3.3% to the lowest level since August 2017. It is on pace for the first annual drop since 2008.
Hong Kong’s housing market is one of the most unaffordable markets in the world.
The decline in November came after an adjusted drop of 2.7% in October. Home prices had fallen 13.8% in the first 11 months of this year.
Moveover, transactions this year are expected to fall to the lowest level in a decade, while there is some hope that the market could make a small recovery next year after the authorities lifted travelling restrictions.
Prices in Hong Kong are being pressured by a weak economy, while a severe epidemic of Covid-19 could increase mortgage costs.
Cushman & Wakefield (NYSE:CWK), real estate consultancy, expected that in 2023 the home prices would be 0-5% lower than this year, with stable prices in the second half and hopefully the interest rate could go to the highest level.
JLL, another consultancy, projected the prices would fall 10% next year for the mass market. The increasing number of unsold units causes the high amount of inventory and this could make developers offer discounts. According to the report by JLL, recent project prices were approximately 7-13% lower than average prices of secondary markets in the same area.
CK Asset Holdings, a major developer owned by the richest man in Hong Kong Li Ka-shing, won a residential land plot in downtown Kai Tak area last week with the price that was much lower than the market expectations.