Hong Kong’s home prices jumped to a record high, joining other global real estate markets that are soaring on low mortgage rates and rising demand as the pandemic slowly recedes.
Values for resale houses rose 0.65 per cent for the week ended Aug. 8, according to Centaline Property Agency Ltd., which started tracking prices in 1993. The last record for the firm’s price index was set in mid-2019 at the beginning of anti-government protests. Residential property values have increased 8.6 per cent since the beginning of the year.
Outsized demand, limited supply and low borrowing costs have fueled the world’s most expensive property market even amid concerns about the city’s future after the protests and the introduction of a national security law by China last year.
The abundance of liquidity has also resulted in soaring prices in other major financial centers around the world. U.S. residential property prices jumped the most in 30 years in April, with even more dramatic rises in many suburban and rural areas where bidding wars are common. Home prices in New Zealand, one of the world’s hottest markets, have risen for 31 straight months.
The rising prices also signal that a potential exodus of residents to the U.K. via a new visa program hasn’t hurt the real estate market in Hong Kong.
In addition to the strong demand from local buyers, mainland Chinese investors are helping boost the market. They made up 11.2 per cent of purchases by value in the first four months of 2021, up from 10.5 per cent in the same period last year, according to Midland Realty.
Prices are expected to keep rising. Cushman & Wakefield expects home values to climb another 5 per cent in the second half of the year.