Hong Kong’s private home prices broke historic records for the 13th straight month last month, with the ascent showing no immediate signs of ending and analysts expecting the rise to continue into next year.
Private home prices rose 1.08 percent last month, marking the fastest pace of growth in six months, data compiled by the Rating and Valuation Department and released yesterday showed.
The index, which began its climb in April 2016, surged 13.1 percent year-on-year, the data showed.
The territory’s flats are ranked the second-most expensive in the world after Monaco, according to data from property consultancy Knight Frank, which shows US$1 million would only buy 19m2 of prime property in Hong Kong, as opposed to 25m2 in New York or 30m2 in London.
“Property prices are high and it’s unaffordable for most ordinary people,” Knight Frank senior director Thomas Lam said. “But right now, I cannot see any major factor that will drastically bring down property prices in the short run.”
Hong Kong Chief Executive Carrie Lam (林鄭月娥) said during an interview last week that the government “has no ways to curb property prices,” adding that while she would do her best to seek more land to boost supply, she has never promised to turn around the price rise.
Major property consultancies expect Hong Kong’s housing market to remain feverish in the coming year and climb a further 5 to 20 percent.
The government has tried to rein in prices with additional taxes and regulations, which came on top of eight rounds of mortgage tightening since 2009 by the Hong Kong Monetary Authority, the territory’s de facto central bank.
However, the net effect of measures like taxes on second homes has been to discourage buying and selling in the territory’s secondary market, Jones Lang LaSalle Inc head of capital markets Joseph Tsang (曾煥平) said.
“I think their intention is good, but they’re using the wrong medicine,” Tsang said. “After eight years, your fever is still going on, and they just don’t want to admit they gave you the wrong medicine.”
A government report released earlier this month said it would be a “huge challenge” to meet its 10-year housing supply target of 460,000 units, which includes 280,000 public housing units.
The quantity of land identified for public housing construction lags behind the target by 15 percent.
“There is no easy or painless option to increase or expedite land supply,” the report stated.
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