Hong Kong’s home prices slid to the lowest in more than six months last week, as the threat of an economic recession continues to dent buyer sentiment, according to the territory’s biggest privately held realtor.
Prices fell 1 percent in the week ended Sunday, its fifth-straight decline and the biggest drop in 17 weeks, Centaline Property Agency Ltd (中原地產) said in an e-mailed statement yesterday.
The value of housing transactions plunged 50 percent last month from the same month last year to HK$22.5 billion (US$2.9 billion), after the government raised minimum down payment requirements, boosted mortgage rates and increased land sales to curb a housing bubble.
Hong Kong home prices may fall as much as 30 percent by 2013, according to Barclays Capital Research’s Andrew Lawrence.
“Looks like the downturn will last for a while,” said Wong Leung-sing (黃良昇), associate director of research at Centaline. “It won’t be a crash as during the Asian financial crisis, but if you look around, there isn’t really anything that can help things turn around in the near term.”
The number of mortgages in which the outstanding debt exceeded the value of the home jumped to 1,653 at the end of the third quarter from 48 three months before, the Hong Kong Monetary Authority said on Oct. 28.
Hong Kong’s economy grew 0.1 percent sequentially in the third quarter, as low unemployment and tourists from China boosted consumption, while Europe’s crisis weighed on exports. The figure released by the government yesterday compared with a revised 0.4 percent contraction in the second quarter.
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