By Chi Jingyi and Yang Kunyi
Transactions and prices of residential properties in Hong Kong rose in October, ending the continuous decline since June, data from the Hong Kong Land Registry showed on Tuesday.
The number of transactions for residential building units increased 16 percent month-on-month to 4,001 in October. The reading for all building units reached 5,075 in October, up 24 percent on a monthly basis, and the total value rose to HK$65.593 billion ($8.37 billion), 80 percent higher than in the prior month.
Primary residential sales stopped falling as developers took a positive view of news from the first-phase trade talks between China and the US, and the somewhat smaller scale of protests, according to a report by Hong Kong real estate agent Ricacorp Properties published on Tuesday.
In terms of secondhand housing, many owners made relatively large price cuts as a response to reality and successfully attracted buyers with inelastic demand, the report said.
The reasons that Hong Kong’s housing market is picking up after months of depression are multiple, but Liang Haiming, a Hong Kong-based economist, agreed that months of street protests have been dragging down housing prices, which stimulated short-term demand.
“Most of the hard-hit industries in the riots are retailing and catering, but core industries such as finance and real estate are relatively tougher, since those industries usually operate with global capital instead of only local demand,” Liang said.
Liang also said that the real estate industry might even be one of the only ones to rise against the odds in the Hong Kong economy in the next six months, buoyed by local policies encouraging home purchases.
“The policy introduced in Hong Kong to relax the mortgage cap will spur demand from homebuyers and provide ongoing stimulus for the industry and increase the volume of transactions,” Liang noted.
However, if prolonged, the protests can easily have a long-term negative impact on the local economy, Yan Yuejin, research director at the E-house China R&D Institute, said.
“The riots can have a negative impact on investment sentiment and long-term ratings, which would pose major risks to Hong Kong’s economic future,” Yan said.
The Chinese national flag and the flag of Hong Kong Special Administrative Region float over the Golden Bauhinia Square, Aug. 5, 2019. [Cover Image: Xinhua]
