Hong Kong Homeowners Cutting Prices Drastically Even as Secondary Property Market Continues to Climb

An increasing number of homeowners in Hong Kong have been reducing their asking prices despite a key property index hitting a six-month high, indicating a weakening confidence in the market’s ability to remain elevated for longer.

While the market remains on the upswing, buoyed by an improving economy following the reopening of the border with mainland China after the Covid-19 pandemic, there are signs of a potential slowdown, with some homeowners looking to avoid increased competition from developers who are launching new projects, according to analysts.

Homeowners have lowered the asking prices for 1,763 units, representing 7.9 per cent of the total 22,352 units available for sale on the website of Ricacorp Properties, one of the major property agents in the city.

“Potential buyers may hesitate to enter the market due to price increases in the first three months of the year,” said Raymond Cheng, managing director of CGS-CIMB Securities. But it may not necessarily indicate a long-term downward trend in home prices, according to Cheng.

The Rating and Valuation Department’s home price index for March climbed 1.35 per cent to 351.4, the highest since 360.3 in September. It was the third straight monthly increase, with gains in Hong Kong’s secondary market adding up to about 5 per cent for the year. But the growth slowed compared with February, when the index gained 2.22 per cent, the most in 33 months.