Home prices drop a further 0.05% w/w mid-May

Second consecutive week of softening.

It has been noted that home prices continued to see a small loss last week, dropping by 0.05% w/w after a 0.06% loss in the preceding week.

According to a research note from Barclays, at 141.30, the latest CCL home price reading has so far corrected 0.7% from the all-time high of 142.36 recorded on 5 April.

Small flats continued their second week of underperformance with a loss of 0.1% vs. large units gaining 0.5% last week. Split by region, only New Territories East gained last week (+0.5% w/w) while Kowloon (-0.3%), New Territories West (-0.4%) and Hong Kong Island (-0.5%) recorded losses.

Here's more from Barclays:

The CCL home price index softened for a second consecutive week. At some level, this appears counter-intuitive as the stock market rally should have contributed to positive wealth effect.

Our recent conversations with estate agents suggest that while this may hold true for the luxury market, for small ticket mass housing units, the strong equity market performance may be a competing source of asset allocation.