Property prices continue to slip

Hong Kong home prices fell for a second consecutive month in June and are expected to extend the dip with price cuts in both primary and secondary markets this month.

But experts are split on the market's outlook for the rest of the year, as the US Federal Reserve left the door wide open on the September rate decision.

Home prices slid by 0.54 percent to 349 points, capping first-half gains at 4.27 percent.

By flat size, prices for small- and medium-sized units (those below 1,076 square feet) fell 0.51 percent from May to 350.6 points.

Prices for large-sized units (of over 1,076 square feet) fell 0.74 percent to 307.3 points.

Martin Wong Shiu-kei, director and head of research and consultancy for Greater China at Knight Frank, said prices could dip 5 to 10 percent in the second half, wiping out the first-half gains. He said the possibility of further hikes by Fed might put pressure on home deals at a time when the boost from China's reopening was fading and the mainland economic recovery was losing momentum, in addition to a heavy inventory of new flats.

Colliers Hong Kong's head of research Kathy Lee Yuen-yan also said concerns about more rate hikes might acclerate home price falls in the second half and trim the full-year price growth to 1 percent at its lowest.

However, developers stayed positive.

CK Asset sales department chief manager William Kwok Tze-wai said the Fed rate-hike cycle was nearing an end and expected transaction volumes will jump about 20 percent in the second half.

Henderson Land Development's general manager of sales department II Mark Hahn Ka-fai believes the latest rate rise will have a mild impact in the long term, given strong housing demand.

Wheelock Properties' managing director Ricky Wong Kwong-yiu shared similar views.

Ricacorp Properties also projected a maximum 5 percent rise in the fourth quarter and a full-year jump of up to 8 percent, benefiting from an input of talent, said chief executive Willy Liu Wai-keung.

But home prices for this quarter could fall about 1.3 percent, he said.

Meanwhile, price cuts are continuing.

Henderson's Baker Circle Greenwich in Hung Hom has released the first price list for 56 units, with the cheapest one priced at HK$3.68 million after discounts, which is 11 percent lower than a previous phase.

In the secondary market, a three-bedroom unit at Island Resort in Siu Sai Wan sold for HK$8.5 million, over HK$1 million cheaper than the original asking price and HK$2 million lower than valuations. A owner at Pine Court in the Mid-Levels put a unit up for sale by tender at an asking price of HK$168 million, down HK$10 million compared to March.