Banks are increasing their valuations of apartments at a number of housing estates, with the biggest month-on-month rise coming in at 7 percent, thanks to improved market sentiment after the border reopening.
Of the 20 housing estates tracked, as many as 16 of them recorded increases in valuations by banks over a month ago, with the rises ranging from 0.5 to 6.96 percent.
Valuations for flats in the other four estates remained flat.
A higher-floor four-bedroom unit at Kornhill in Quarry Bay, with an area of 595 square feet, was the best performer.
The unit saw its valuation rise to HK$9.83 million from HK$9.19 million last month, and those gains have been chalked up over a period of three consecutive months.
The unit that posted the second-largest monthly increase in valuation was a middle-floor unit at City Garden in North Point, which has seen a reversal of its declining valuations over the past several months.
The latest valuation for the 581-sq-ft unit increased from HK$8.74 million to HK$9.27 million, a growth of 6.06 percent from the previous month.
The number of transactions at City Garden had been low in the past, but it jumped 35 percent this month, thanks to increasing confidence among buyers after the border reopening, said Chris Wong, executive director at Century 21 Sunrise Property Agency, adding that it was not surprising that banks were adjusting their valuations based on market conditions.
Valuations for a number of entry-level homes have also increased significantly.
For example, a higher-floor unit at Tsuen Wan Center with an area of 377 sq ft has seen an increase in valuation for three consecutive months, with the latest valuation coming in around HK$4.48 million, an increase of
3.7 percent from HK$4.32 million in February.
Of the four housing estates that saw bank valuations of flats remain the same, an example was a 590-sq-ft flat at South Horizons in Ap Lei Chau, which has seen the same HK$8.94 million valuation for two months.
Many buyers who are purchasing homes for their own use have entered the market recently and transaction prices are gradually returning to market prices, according to mReferral Mortgage Brokerage Services chief vice-president Eric Tso Tak-ming.
This shows that the market is stabilizing in both transaction volumes and prices, Tso said, expecting the valuations of flats to remain on an upward trend in the coming month.
That comes as major banks in the city opted to keep mortgage rates unchanged after the Hong Kong Monetary Authority raised its base rate by 0.25 percentage points last week in lockstep with the US Federal Reserve.
Hongkong and Shanghai Banking Corp maintained its prime rate at 5.625 percent, followed by Hang Seng Bank and BOC Hong Kong. Standard Chartered Hong Kong's prime rate also stayed at 5.875 percent.
However, the Hong Kong Monetary Authority has warned in a statement interbank borrowing costs may stay high and that banks may need to adjust their lending rate.
Meanwhile, Centaline Mortgage Broker said Hong Kong's interest rate might have peaked and expected one more rise at most in the United States this year.
