Hong Kong home prices snap falling streak in April

HONG KONG (Reuters) -Hong Kong's home prices ended four months of decline and edged up in April, government figures showed on Wednesday, as falling mortgage rates helped lift buying sentiment.

BY THE NUMBERS

Private home prices rose 0.4% in April from the month before, following a revised 0.3% fall in March, data from the Rating and Valuation Department showed.

The prices have dropped 1.2% so far this year to their lowest level since 2016.

WHY IT'S IMPORTANT

Home prices in Hong Kong, one of the world's most unaffordable cities, have tumbled nearly 30% from a 2021 peak, hurt by higher mortgage rates, a weak economic outlook, and poor demand as many professionals have left the territory.

Authorities tried to prop up the sector last year, lifting all curbs on property purchases and relaxing down payment ratios, but housing demand has remained soft.

MARKET COMMENTS

Realtors forecast home prices in 2025 could rise or fall by 5%, depending on the pace of official rate cuts and the severity of trade tensions between China and the United States.

Eddie Kwok, executive director of real estate consultancy CBRE, said if the interbank rate continues to fall, the residential property market may see a recovery as it may cost less to repay mortgage as compared to rent.

CONTEXT

One-month Hong Kong dollar interbank rate HIBOR, which many of the mortgage plans are linked to, hit a fresh three-year low this week, making mortgage rates more affordable for home buyers.

(Reporting by Clare Jim; Editing by Sonali Paul)

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