Market prices increased for the 15th consecutive month but a slowdown may be looming.
Hong Kong’s red-hot housing market shows no sign of slowing down as secondary home prices extended its steep climb for the 15th consecutive month after rising 15.4% YoY in January, according to OCBC Treasury Research.
Residential transactions also rose for the third consecutive month after growing 34% YoY to 5,482 deals in February but this is likely to abate slightly in the coming months as the government relaxes property control measures on upgraders.
“In addition, one-month HIBOR has been under pressure given flush liquidity. This allows banks to reduce the spread on HIBOR-based mortgage plans,” (from one-month HIBOR + 1.3% to one-month HIBOR + 1.25%), the report added.
“If this is the case, housing demand may take a hit. Furthermore, the government is planning to add more new supply of private and public housing than original estimate. This may also help to calm the overheated housing market. All in all, we expect housing price growth to moderate this year.”
Photo from Baycrest - Own work, CC BY-SA 2.5
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