From a peak of 21.6% in June 2017, home price growth have slowed to 14.7% in May.
Hong Kong’s overheated property market appears to be slowing down as the city’s runaway home price growth have slowed from a peak of 21.6% YoY in June 2017 to 14.7% YoY in May, according to BMI Research.
The number of primary transactions last weekend have also plunged 80% YoY with units from Victoria Harbour and St Martin making the bulk of sold flats, according to UOB Kay Hian.
Secondary market sales volume also fell by half on a week-on-week basis to 4 transactions recorded in 10 major estates.
“Home prices down 0.2% WoW. The CCL index dipped to 187.31, suggesting that home prices moderated slightly for the week ending July 15,” noted UOB analyst Shaun Tan.
The earlier tax on vacant properties also appears to be doing its job as developers in Yuen Long are slashing unsold home prices by as much as $10m in a bid to dispose off units quickly.
However, there is room for further decline as BMI believes that the rate of price increase still remains unsustainable, dampening market take-up in the private sector.
In fact, private housing take-yup fell to an average from 20,395 units from 1996 to 2006 to 11,705 units per year from 2007 to 2017 amidst growing unaffordability.
“A continued rapid rise in prices in the red-hot residential property market raises the risk of a sharper downturn down the road, which would weigh significantly on macroeconomic stability,” BMI added.
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