Hong Kong home prices post record-breaking growth in 2017

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

HONG KONG (Reuters) - Hong Kong’s private home prices surged to a fresh peak for the 14th straight month in December, bringing the increase for 2017 to 16.7 percent and likely adding to concerns about housing affordability in the city.

A government monthly index shows home prices rose 1.41 percent in December compared to November, extending a marathon trend of price increase that began in April 2016.

The provisional annual index rose 16.7 percent, while the December figure rose 14.8 percent year-on-year.

Rents also shattered records for the 10th month, edging up 0.27 percent and rising 7.89 percent year-on-year. The 2017 figure increased 8.56 percent when compared to 2016.

Analysts expect the financial hub’s property prices to lift a further 5 to 20 percent in 2018 partly due to high liquidity and a severe supply-demand imbalance.

The Asian financial hub has one of the most expensive property markets in the world, with the average cost per square foot of an apartment about HK$12,100 ($1,547.31), according to property agency Midland Realty. On the prime Hong Kong Island, the average cost is about HK$16,200 per square foot.

High property costs have spurred political discontent in the city and pushed more people into semi-illegal partitioned flats or onto the streets.

Reporting by Venus Wu; Editing by Sam Holmes