Hong Kong home prices edged up in June, as softer interbank rates helped ease mortgage burdens, according to property consultancy Knight Frank.
Smaller and mid-sized flats continued to outperform, buoyed by resilient demand from owner-occupiers, and two- to three-bedroom units made up over 80 percent of total transactions, said Martin Wong, senior director and head of research and consultancy at Knight Frank Greater China.
In contrast, buyers remained cautious toward larger and luxury homes, where activity was limited to sporadic deals, Wong noted.
Home prices fell about 0.9 percent in the first half but have stabilized now, according to Wong. Buyers prefer new homes as developers align pricing with market conditions, while the secondary market remains subdued.
He expects market sentiment to improve in the second half of the year, helped by developers stepping up efforts to clear unsold inventory, a gradual drop in the volume of unsold units, and the prospect of lower interest rates, all of which could help stimulate demand.
Wong forecasts total private residential transactions, including new and second-hand homes, to reach 58,000 to 60,000 this year, with primary market deals comprising about 40 percent. Overall home prices are expected to remain flat or decline slightly.
He also anticipates a steady rental trend that may hit a record high, with increases of 3 to 5 percent, slightly above last year's 3.5 percent rise.
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