Hong Kong home prices may rise 11% this year

HONG KONG: Home prices in Hong Kong resumed their upward course last month after a dip in December, rising an average of 2.1% month-on-month.

The average home cost 19.6% more than a year earlier.

Property agent Midland Realty said buyers had begun returning to the market following the government's imposition in November of cooling measures to rein in price growth and curb speculation on homes.

Another agent, Centaline Property Agency, said home seekers had decided to buy sooner rather than later as they were concerned prices would rise at an even faster pace after the Lunar New Year holiday.

Midland Realty's chief analyst, Buggle Lau Ka-fai, expects the government to introduce more cooling measures to slow the growth in prices. Still, he expects the average home to cost 11% more by the end of the year than it did last month, when the average price per square foot was HK$5,345 (RM2,079). Midland Realty, one of the two biggest property agents in the city, noted that the average price is still 14% below the HK$6,208 per square foot at the market's peak in June 1997.

Lau said the price increase refl ected buyers' positive expectations for the property market despite the cooling measures. Sales were barely aff ected when the government announced policies to cool the housing sector in November. Average home prices fell 0.4% month-on-month in December, Lau said.

Th e government announced additional stamp duty would be levied on homes resold within two years.

Highrise residential apartments are seen on Hong Kong island.

Sales of second-hand homes at the 10 largest housing estates last month rose 6.58% to 729, compared with the 684 deals achieved in December.

by Peggy Sito Th e additional duty was set as high as 15% if a home was resold within six months.

The Hong Kong Monetary Authority also reduced the amount that banks could lend to buyers of homes worth HK$12 million or more from 60% of the property's value to 50%. The maximum mortgage ratio for properties worth between HK$8 million and HK$12 million was cut from 70% to 60%.

"Sales volume has been picking up and prices are increasing as home seekers are gradually digesting the impact of the measures," said Lau.

"Th e continuing low interest rates, pay rises and bonus payments contributed to the improved buying sentiment last month." Centaline painted a similarly positive picture. Sales of secondhand homes at the 10 largest housing estates last month rose 6.58% to 729, compared with the 684 deals achieved in December.

Sales totalled HK$2.91 billion, against December's HK$2.54 billion.

Sales at several big housing estates jumped last month compared to December. At Taikoo Shing, sales were up 60.3% at 93. — SCMP