HONG KONG: Hong Kong private home prices fell 6.8 per cent in 2023 after declining for the eighth consecutive month in December, dragged down by fragile market sentiment, high interest rates and a week economic outlook.
Home prices in one of the world's most expensive property markets dropped 1.4 per cent in December from the previous month, official data showed on Monday, following a revised 1.9 per cent fall in November.
House prices are forecast to continue their downward spiral this year, with UBS and Citi predicting a drop of 10 per cent, following a 20 per cent decline since the 2021 peak.
Knight Frank expects prices to drop another 3-5 per cent in the first half, before stabilizing in the second half as the impact from the interest rate hike cycle fades.
"The market obviously lacks confidence in the short term, the housing prices will appear to be a 'L' shape this year," said its Greater China head of research and consultancy Martin Wong, adding that pressure has also come from developers cutting selling prices recently to clear inventory.
Early in January, the Hong Kong government said it would not sell any residential or commercial land in the first three months of 2024, citing sluggish market sentiment and high vacancy rates. This would be the first time the government has not rolled out any residential sites in a quarterly sale.