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Wednesday, March 15, 2017, 17:37

Home prices rise as buyers absorb cooling measures

By Duan Ting
Home prices rise as buyers absorb cooling measures
This picture taken on Oct 22, 2015 shows high-rise buildings in Hong Kong. (AFP PHOTO / Philippe Lopez)

Hong Kong home prices have moved up but sales volume has declined in the first quarter of this year, a real-estate service firm says, predicting further price rises this year.

Government cooling measures cut home sales volume from 6,739 units in November last year to 3,286 in January, before rebounding to 4,079 last month

Cushman & Wakefield said prices of representative homes rose 4 percent to 7 percent while the general sales volume had dropped by a third.

Alva To, vice-president and head of consulting, Greater China, at Cushman & Wakefield, said the rebound in Hong Kong residential property prices showed the market cooling measures, including the rise in stamp duty and other buying costs, had been absorbed by the public. Capital flowing into the Hong Kong market and more new housing supply in the pipeline this year would support Hong Kong’s property market amid relatively stable and healthy economic growth.

Private housing supply in Hong Kong would amount to 25,000 units annually in the coming three years, a recovery to a more reasonable level, a Cushman & Wakefield report said.

Hong Kong home prices, including luxury residences, would rise 10 percent this year, To said, a more positive forecast than the estimate at the end of last year. Prices of second-hand homes would be driven by the primary market and the home-sales volume was expected to rise further in the next quarter, supported by primary sales.

A number of buyers were upgrading to larger homes, To said.

READ MORE: HK retains the world's 'costliest homes' crown

The average price of a City One Sha Tin unit this month was HK$14,700 per square foot for example, up by 6 percent year-to-date. The average Taikoo Shing flat rose 4 percent to HK$17,000 per square foot.

Government cooling measures cut home sales volume from 6,739 units in November last year to 3,286 in January, before rebounding to 4,079 last month.

The market expected United States interest rates to rise two or three times this year, To said. This may not have a significant impact on the Hong Kong market as they expected local credit costs would remain low since banks in Hong Kong were unlikely to follow the American rate increases. He said buyers should know they could make their purchases before the low interest-rate environment changed.

There was no direct correlation between Chinese mainland developers snapping up sites in Hong Kong and property prices. Home prices largely depended on the supply and demand situation in the market.

Cushman & Wakefield said that in the first quarter of this year, previously quiet investment sectors such as retail and hotel properties, together with luxury residential units, had attracted more attention.

tingduan@chinadailyhk.com
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