The Rating and Valuation Department released the August home price index. Eddie Kwok, Executive Director, Valuation & Advisory Services, CBRE Hong Kong commented:  

Residential Prices

• With developers offering more incentives and attractive pricing, pressure is mounting on the secondary residential market. 
• Based on the RDV figures in August 2024, residential prices dropped by 1.7% month-over-month and 13.3% year-over-year, marking the fourth consecutive month of decline. 
• Despite ongoing downward adjustments, the rate of decline in residential prices has narrowed as the market structured the potential US Federal Reserve rate cut.

Outlook

• With US Federal Reserve rate cut, major banks in Hong Kong reduced prime rate which may provide support for the residential property market. Property prices are expected to stabilize in the short term. 
• However, in the medium term, given the current high inventory levels, developers are likely to prioritize cash collection at discounted prices, which will continue to exert pressure on residential prices.

Residential Rent

• Residential rents increased by 1.1% month-over-month and 6.8% year-over-year.
• The summer period typically sees a rise in accommodation demand as incoming non-local university students prepare for the new academic year. Some developers have even adjusted their strategies, shifting from sales to leasing in order to capture strong rental demand.
• In the medium term, the surge in residential rents may moderate due to: (i) end users currently renting units who may choose to purchase their own properties, and (ii) developers converting more units from sale to rent, thereby increasing the supply of rental accommodations.

Download Hong Kong Property Review Monthly Supplement (September 2024) here.

For further information, please contact Eddie Kwok, Executive Director, Valuation & Advisory Services, CBRE Hong Kong as the details below.