Global Property Guide

Financial Information for Residential Property Buyers

Trend: house prices up 13.15% during the year to Q2 2018

Hong Kong's housing market continues to boom, with residential property prices surging 13.15% during the year to Q2 2018, from y-o-y rises of 12.28% in Q1 2018, 12.78% in Q4 2017, 13.41% in Q3 2017, and 19.27% in Q2 2017. Quarter-on-quarter, house prices increased 5.05% in Q2 2018. 

The latest house price rises come despite the government raising stamp duties for all non-first time homebuyers starting November 2016 and cutting allowable loans on residential and commercial properties in May 2017. In June 2018, Chief Executive Carrie Lam revealed another series of cooling measures, including a tax against vacant flats.

Analysis:  Demand continues to rise 

In the first half of 2018, the total number of property transactions in Hong Kong increased 5.6% to 33,896 units from a year earlier while sales values surged 8.4% to HK$321.54 billion (US$40.96 billion), according to the Ratings and Valuation Department (RVD). The number and value of transactions rose by 12.6% and 30%, respectively, in 2017. Strong housing demand has been propelled by low interest rates and limited supply of land, which the government controls.

Rents, rental yields: poor yields, at just above 2%

Apartment costs in Hong Kong are very high, at around $28,570 per sq. m. 

Hong Kong: city centre apartment, buying price, monthly rent (120 sq. m)
  Buying price Rate per month Yield
Hong Kong $ 3,714,113 $ 7,267 2.35%

Recent news: Strong economic growth

Hong Kong’s economy continues to grow strongly, by 3.5% in Q2 2018 from a year earlier, following a 4.6% growth in the previous quarter. The economy expanded by 3.8% last year, the highest growth since 2011. The IMF recently raised its 2018 growth forecast for Hong Kong to 3.6%, up from its earlier estimate of 2.6%.