The Magazine for Asian Investors
On Wednesday (July 27), private home prices in Hong Kong fell sharply in June, dropping to the lowest level since December 2020, as homebuyers shunned home purchases due to the uncertain outlook and rising interest rates.
Home prices in one of the world’s most difficult-to-afford housing markets fell 1.1% last month from a month earlier, compared with a 0.2% drop in May.
Hong Kong interest rates tend to move in line with U.S. rates because Hong Kong’s currency is pegged to the dollar. However, they have lagged behind their U.S. counterpart in recent months.
However, the market expects major banks in the city to raise their best lending rates this week if the Federal Reserve raises rates as quickly as expected.
Hong Kong’s interbank rate, used as a benchmark for mortgage pricing, rose to its highest level since May 2020.
Real estate prices in the financial center are down 3.4% so far this year.
Hong Kong’s economy has slumped this year under some of the world’s toughest restrictions to curb the spread of the coronavirus. Confidence has improved, however, after the city relaxed most of the measures and many new developments were launched.