Official data for June property sales is likely to come out this week.
24:45
The grim reality of life in Hong Kong’s ‘coffin homes’ | Talking Post with Yonden Lhatoo
The grim reality of life in Hong Kong’s ‘coffin homes’ | Talking Post with Yonden Lhatoo
June’s figures represent the second straight monthly fall in property transactions after an initial surge that came in the wake of the government’s lifting of all property restrictions in February.
In March, sales rose 57 per cent to 5,013 units, marking the first full month of a restriction-free property market. Then in April they almost doubled to 9,880 deals, their highest level in almost three years.
“Purchasing power has been gradually digested, and the current high interest rate environment has slowed down the motivation to enter the market,” said Chan.
“In addition, the economic recovery is slow and the stock market performance is not ideal. Therefore, there is insufficient motivation to enter the market, resulting in a further decline in trading volume.”
In the first half of the year, funds raised in new share listings in Hong Kong dropped to a two-decade low of US$1.5 billion, according to data released by the London Stock Exchange Group. Meanwhile, local interest rates remained at a 23-year high.
Looking ahead, Chan said a cut in interest rates is only likely to come in the fourth quarter of the year.
“It is likely that residential transaction volume in the second half of the year will shrink by about 20 per cent compared with the first half,” Chan said.
There were 4,165 private home sales in June, down 36 per cent from the previous month.
The decline in transactions suggests the “initial enthusiasm once the property cooling regulations were lifted has started to wane,” said Knight Frank in its latest report.
So far this year, there have been 34,783 property transactions worth HK$278 billion, Midland data show. That is well over half the 58,035 property units that changed hands for HK$478 billion in the whole of 2023.
