Will cooling measures control the surge?
Residential sales rebounded slightly by 6% month on month in June 2017, with the market having digested part of the cooling impact of policy tightening measures, according to Knight Frank.
Home prices continued on their upward trend. Official data show that they continued to climb in the 14 months ended June 2017, rising over 22%.
Developers continued to offer various sweeteners to attract buyers, and primary sales remained stable.
Here's more from Knight Frank:
The secondary market was relatively quiet, but a number of luxury residential developments registered record-breaking transactions last month, including Carolina Garden on the Peak, The Mayfair in Mid-Levels Central, Sorrento and The Arch in Tsim Sha Tsui as well as Mount Beacon in Kowloon Tong.
On the leasing front, the market entered the peak season before the new school year starts in August / September.
With reduced housing budgets, some tenants shifted to less prestigious areas and some landlords became more flexible in offering rent-free periods.
Potential buyers have started to feel the impact of rising rates, after the US Fed raised interest rate twice this year and major local banks raised mortgage rates slightly.
Combined with the impact of increasing housing supply, which could amount to 18,000 units in the second half of the year, we expect residential price growth to slow down in the coming months. Over 2017, home prices are expected to increase 5-10%.
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