Downward property trend tied to labor

The decline in Hong Kong's working population may drag down property prices according to real estate consultancy Knight Frank.

But luxury home buyers remained undeterred as evidenced by the sale of houses on The Peak for over HK$2.6 billion.

Due to the correlation between the size of the labor force and home prices and rents, the 0.8 percent decline in the working population during the first quarter led Knight Frank to forecast a potential fall of 1.2 to 3.6 percent in property prices over the next three months.

Knight Frank director Martin Wong Shiu-kei said despite a robust economic and tourism rebound following the full reopening of borders the property market remained impacted by various unfavorable macro factors such as high interest rates, weak imports and exports and a poor stock market performance.

Unless there is a notable labor force rebound in the coming months, he said, home prices and rents in Hong Kong are expected to underperform this year.

However, Twenty Peak Road by V, a luxury project developed by V Group, saw significant activity as four houses were sold there yesterday for a total of HK$2.67 billion. The houses, ranging in area from 3,722 to 4,740 square feet, went for from HK$150,200 to HK$181,400 per sq ft.