Residential prices drop for the fourth consecutive month in August

Prices dropped by 13.3% YoY.

Residential prices fell for the fourth consecutive month in August, dropping by 1.7% month-on-month (MoM) and 13.3% year-on-year (YoY), CBRE reported.

Despite this decline, the rate of decline in residential prices slowed amidst the potential Fed rate cut.

‘With US Federal Reserve rate cut, major banks in Hong Kong reduced prime rate which may provide support for the residential property market. Property prices are expected to stabilize in the short term,” Eddie Kwok, executive director for Valuation & Advisory Services, CBRE Hong Kong said.

Meanwhile, residential rents rose 1.1% MoM and 6.8% YoY. During the summer period, developers shifted from sales to leasing to capture more rentals as non-local university students prepare for the new school year.

However, in the medium term, CBRE said that rents may moderate due to renters choosing to purchase and developers opting for more rentals than sales.

“In the medium term, given the current high inventory levels, developers are likely to prioritize cash collection at discounted prices, which will continue to exert pressure on residential prices,” Kwok said.