Hong Kong’s November home prices and rents diverge as cheaper loans drove tenants to buy

Prices of lived-in homes rose marginally for the second straight month in November, as the closely watched gauge edged upwards to 290.9 from 290.7 in October, according to the Rating and Valuation Department. Home prices fell 6.55 per cent in the first 11 months of the year, slumping 27 per cent from a record high in September 2021.

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Rents dipped last month for the second time, dropping by 0.36 per cent to a five-month low of 193.1, after a 0.7 per cent drop in October. Rents have risen 3.8 per cent in the first 11 months of this year.

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“Residential prices have stabilised after declining for five consecutive months,” said Eddie Kwok, executive director for valuation and advisory services at CBRE Hong Kong, adding that a clearer outlook for home prices is likely to emerge after the Lunar New Year festivities next month.

“Since the US Federal Reserve began its interest rate reduction cycle in September, the average monthly residential transaction volume for October and November reached 5,498, surpassing the average transaction volume recorded between 2017 and 2021,” said Kathy Lee, head of research at Colliers Hong Kong.