In August, Hong Kong saw a 37% month-to-month growth in sales, signaling further improvements in one of the most active real estate hubs in Asia.
The overall number of transactions reached 5,821 units in August with a value of HK40.6 billion, compared with 4,243 units in July with a value of HK$29.7 billion, according to data from the Land Registry.
In February, homes sales in Hong Kong fell to a 25-year low of 1,807 units.
The rebound is largely attributed to robust activity in the market for new homes, especially projects offering small flats, according to the global real estate consultancy Knight Frank.
For instance, “Ori” in Tuen Mun, sold over 80% of its 370 units in the first batch of sales, while “The Met BLOSSOM, in Ma On Shan, managed to sell all its 260 units on the first day of its launch. Both developments feature one bedrooms with an approximately 250 square feet.
But home prices overall are still down 8% from their peak in September 2015, according to Knight Frank.
“We expect growth in home prices to remain suppressed despite the recent pickup in sales momentum, given the increase in supply and a potential U.S. interest-rate hike,” said Pamela Tsui, Knight Frank’s senior manager for research and consultancy for Greater China.
Mortgage rates in Hong Kong are linked to the Federal Reserve rate via the pegged currency. If the Fed raises U.S. interest rates, mortgages in Hong Kong will be costlier for home buyers.
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