Home price index falls 6.8% YTD, sales volume up 67% MoM in October

The month saw 4,506 residential unit transactions.

October residential price index rose by 0.6% month-on-month (MoM) to 290.1 points, dropped 6.8% year-to-date (YTD), according to the Rating and Valuation Department.

Residential transactions during the period increased 67% MoM to 4,506 units, with both primary and secondary markets experiencing an uptick in transactions amidst the Fed rate cut in September and the relaxed mortgage loan-to-value- (LTV) ratio.

First-hand residential sales also tripled to 1,611 units as buyers awaited the Fed’s confirmation of the initial rate cut in September. 

Meanwhile, the rental index fell by 0.3% MoM to 194.9 points, with an accumulated increase of 4.8% YTD. In addition, approximately 21,000 completed residential units remain unsold.

According to Kathy Lee, Head of Research at Colliers, future transaction volumes will depend on the extent of rate cuts in 2025. She noted that the increased uncertainty following Trump’s election victory could indicate fewer rate reductions, potentially exerting further downward pressure on property prices during their recovery phase.

“We are optimistic about the positive impacts resulting from the enhancements to the "New Capital Investment Entrant Scheme," which now allows investment in residential properties valued at least $50m, with up to $10m counting towards the total capital investment, We anticipate an increase in interest and transaction volume for residential properties valued at $50 or above,” Lee said.

“With an encouraging influx of talents arrival in Hong Kong and their dependents under various talent schemes reaching 160,000, we anticipate that residential property prices will stabilise in the last two months of 2024 and into 2025,” she added.