Hong Kong home prices seen firm as volume drops amid protests

HONG KONG – Hong Kong’s existing home transactions dropped amid pro-democracy protests now in the third week, which prices are holding firm, the Bloomberg news agency reported. The number of homes changing hands fell about 20 per cent so far this month, compared with the same period in September, as buyers and sellers become more cautious, according to Mr Sammy Po, residential chief executive at realtor Midland Holdings. While some homeowners have been more willing to accept prices cuts of as much as 3 per cent since the protests began, most have not budged, Mr Po said.

Home prices, which hit new highs last month, will not be significantly affected by the political standoff that saw as many as 200,000 protesters occupy Hong Kong’s key roadways, said property broker Savills. Homeowners are not in a hurry to offload their properties, even as some potential buyers are deterred by the city’s political uncertainties, according to Citigroup.

“It’s a normal reaction for people to take a wait-and-see approach,” said Mr Wong Leung-sing, an associate research director at Centaline Property Agency, Hong Kong’s largest privately held realtor.

Existing home prices, tracked by Centaline, dropped 0.4 per cent in the week ended Oct 5 after the protests started on Sept. 26. Prices, which declined as much as 5.2 per cent since the government doubled a property tax in February last year, have rebounded 7.3 per cent this year.

“If it persists and worsens, it will affect people’s livelihood and the economy,” said Midland’s Mr Po. “Then the weakened purchasing power will affect the property market.”