November 29, 2019 / 4:33 AM / 12 days ago

Hong Kong home prices fall for fifth straight month in October

(Reuters) - Hong Kong private home prices slipped for a fifth consecutive month in October as the Asian financial hub grapples with its biggest political crisis in decades, although the pace of decline slowed.

FILE PHOTO: Public and private housing blocks are seen in Hong Kong October 6, 2016. REUTERS/Bobby Yip

October prices dropped 1.3% in one of the world’s least affordable property markets compared with a revised fall of 1.7% in September, government data showed on Friday.

“Looking at the social and market situation, the price index will continue to decline in November and December,” said Thomas Lam, executive director of property consultancy Knight Frank.

He added that low interest rates would provide some support.

The property sector has been relatively resilient compared with the tourism and retail sectors which have been hit badly by six months of often violent anti-government protests and the U.S.-China trade dispute. Hong Kong’s home prices are still up 4.6% so far this year.

Aiming to support first-time home buyers, the government last month relaxed rules, allowing them to borrow as much as 90% of a home costing up to HK$8 million ($1 million).

That relaxation of the mortgage cap for first-time buyers as well as a lending rate cut helped restore purchasing power in the housing market in November, Knight Frank said this week.

Knight Frank also expects a planned vacancy tax will prompt developers to dispose of unsold stock at attractive prices for the remainder of 2019.

Realtor Centaline has estimated that sales in the secondary housing market in November will hit their highest level in six months, climbing 40% more than October.

Commercial property prices have also been disappointing for sellers. Although an auction this week saw a record amount paid for a Hong Kong property site, it was at the lower end of estimates.

Sun Hung Kai Properties Limited (0016.HK) won the auction for a commercial site above the high speed railway station that links the city to the mainland with its HK$42.2 billion ($5.4 billion) bid.

Property surveyors had given a range of HK$38 billion to HK$79 billion.

Reporting by Clare Jim; Editing by Edwina Gibbs

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