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The private domestic property price index in Hong Kong rose for the second consecutive month to hit a four-month high of 345.9 in February, the Rating and Valuation Department said, but experts noted that the uptick may be curtailed by an increase in supplies.
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The 2.22 percent month-on-month increase in February was the biggest monthly growth since June 2020. But the index is still 9.83 percent below that a year ago.
The price index for small and medium-sized units (those below 1,000 square feet) rose 2.24 percent month on month and the index for larger units (1,000 sq ft or above) increased 0.56 percent.
Among the small and medium-sized units, Class B housing units (431 to 752 sq ft) saw the most significant monthly growth of 2.35 percent, followed by Class A (431 sq ft or less) with an increase of 2.19 percent.
The increase in price for large units under Type E (1,722 sq ft or above) was the least among all, with a growth of only 0.6 percent month on month.
Ricacorp predicted the rebound in the property market to continue with home prices rising by 6 percent in the first quarter and remaining favorable in the second quarter.
March is expected to end with property prices up by 2.5 to 3 percent, supported by the reduction of ad valorem stamp duty in the budget, strong sales in the primary market and the lifting of all Covid measures, according to Ricacorp.
It said that on the condition of mortgage rates stabilizing, home prices in the second quarter will rise by 5 percent that will widen the price growth by 10 to 12 percent in the first half of the year, with an opportunity for the yearly figure to recover the 15 percent decline recorded last year.
However, Martin Wong, Knight Frank head of research and consultancy for Greater China, was skeptical, saying that short-term high interest rates, inadequate purchasing power and an increase in the new supplies are still hindering the pace of recovery in the property market.
Wong said that as developers launch a large number of new developments, it puts pressure on the property price index.
He expected property prices to remain low in the first half of the year, although there has already been a significant rebound in transaction volume.
The main theme for the property market this year is destocking, he said, and some developers have begun launching their new projects. It is anticipated that the monthly transactions on average will increase to 1,300-1,500 for the remainder of the first half.
himo.liu@singtaonewscorp.com
