Hong Kong to see another wave of record home prices: Knight Frank

Home prices have been on an upward trend for seven consecutive months.

A recent Knight Frank report says Hong Kong’s residential market saw strong demand amid the stable pandemic situation and gradually improving local economy. Despite the slower pace of sales by developers, Knight Frank says first-hand property projects, such as La Marina atop Wong Chuk Hang Station and Wetland Seasons Bay I in Tin Shui Wai, recorded booming sales with a massive oversubscription by local buyers. 

“The second-hand market continued to register high-volume transactions of around 5,000 for the sixth consecutive month, with 5,546 residential transactions recorded in August.”

Here’s more from Knight Frank:

Along with the high transaction volume, home prices have been on a bull run for seven consecutive months. The housing price index edged up further by 0.46% MoM in July, just short of the record high by 0.15% in May 2019, according to the Rating and Valuation Department. 

The second-hand luxury market, however, turned quiet in August, since homebuyers turned cautious about chasing high prices, and owners’ bargaining space narrowed. On the leasing front, transactions with an average monthly rent of HK$80,000 or above were active, as some luxury property owners provided incentives to attract tenants. 

Against the backdrop of surging home prices, coupled with strong local demand and low interest rates, another wave of record home prices may soon emerge. We expect buying interest to persist until the end of year, but buyers will become more cautious and take a wait-and-see attitude as prices are approaching new highs, leading to stable or modest growth in activity in the fourth quarter. Total transaction volume for the whole year is expected to be between 63,000 and 65,000.