Hong Kong (Reuters) – According to the most recent official statistics released on Tuesday, private property prices in Hong Kong declined in May, according to the most recent official statistics released on Tuesday, as prospective buyers became concerned about rising borrowing costs.
According to official data, home prices decreased 0.3% month-over-month in May, compared to a corrected 1.0% increase in April. From January to March, prices decreased month over month. For the twelfth consecutive year, Demographia classified the Asian financial hub as the world’s most overpriced housing market.
This year, Hong Kong’s economy faltered under some of the world’s strictest restrictions to limit COVID-19 outbreaks, but attitudes improved after the city removed the majority of the restrictions and waves of new construction projects were launched.
In May, the number of home purchase agreements reached a 10-month high, up 59% from April.
Realtors say that the property index mostly tracked transactions in the secondary market, while sales in the new home market stayed the same.
In anticipation of anticipated rate hikes in the second part of the year, some homebuyers have become more cautious. The city’s interbank market rate, which is related to mortgage rates, is already climbing.
The Hong Kong Monetary Authority raised its overnight discount window base rate by 75 basis points to 2% this month, following a similar increase by the US Federal Reserve; however, most banks in the city chose to maintain their best lending rates.
The governor of the de facto central bank urged the general population to “seriously examine and handle the relevant risks” while making mortgage and real estate acquisitions.
This month, the benchmark used to price mortgages, the Hong Kong Interbank Offered Rate (Hibor), for one month, reached its highest level in two years.
Hong Kong property prices declined in May due to rising interest rates.
