World’s most expensive residential market set for 15% price growth this year
Hong Kong home prices are expected to finish the year 15% higher than a year earlier, as new property launches accelerate and buyers return as the market absorbs geopolitical and economic uncertainties.
Hong Kong is set to experience a 15% rise in residential property prices this year, according to a Deutsche Bank projection. The city has been identified as the world's most expensive residential market, according to Midland Realty executives during a press conference. Local banks are anticipated not to follow any U.S. Federal Reserve interest rate increase this year, which bolsters the positive outlook.
Midland Realty CEO Dave Ma Tai-yeung stated that developers are accelerating new project launches due to improved market sentiment, leading to a forecast of a 50% increase in first-hand property transactions in the final quarter to 5,100 units. Second-hand residential transactions also show signs of stabilization. First-hand property transactions rebounded to 1,100 units in August after two months of decline, according to Midland data.
Benny Sham, a research analyst, predicts that developers will continue offering attractive prices for new homes, encouraging buyers to shift from the secondary market. Eric Tso Tak-ming, chief vice-president at mReferral Mortgage Brokerage Services, noted that Hong Kong banks may raise their prime lending rates slightly instead of immediately following U.S. rate increases.
Hong Kong's monetary policy has aligned with the Federal Reserve's since 1983, but commercial banks have the discretion to adjust their rates. Despite the February budget's stamp duty increase on super-luxury homes, demand remains robust, with over 80 first-hand residential property transactions exceeding HKD100 million taking place this year.
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