'Most Expensive City for Housing' Is a Thing of the Past... Hong Kong Housing Prices Drop After City Lockdown

Published 13 Apr.2022 10:30(KST)

[Asia Economy Reporter Kim Hyunjung] The housing prices in Hong Kong, once the most expensive in the world, have continued to decline following city lockdown measures due to COVID-19.

Bloomberg reported on the 12th (local time) that Hong Kong's housing prices have fallen more than 6% since peaking in August last year, and with residents rapidly leaving the city, recovery seems distant. Some analysts predict an additional 20% drop by 2025 due to rising mortgage interest rates and economic slowdown.

Ada Chan, who was trying to sell a three-bedroom apartment near the University of Hong Kong, said, "In over 15 years of buying and selling, I have never seen the real estate market this quiet." The property has remained unsold for over a year, which Bloomberg noted is surprising in a city that once experienced a real estate investment boom.

She purchased the 500-square-foot apartment in 2018 for 17 million Hong Kong dollars and expected its value to be 18.5 million Hong Kong dollars at the time she hoped to sell. However, she now told Bloomberg, "I just hope not to incur any losses."

Ivan Wong, director of the local real estate agency United Property, recently attributed the downturn to COVID-19. He explained, "There is pent-up demand that will accelerate transactions in the coming weeks, but in the short term, uncertainty is too high to raise prices."

Locals are bewildered by the sluggishness of the Hong Kong real estate market, which had been rising continuously for the past 20 years. Hong Kong housing prices surged 449% from the low point in 2003 until recently. This figure stands out even compared to the 100% increase in U.S. housing prices during the same period. Last year, the region's highest-priced home sold for 640 million Hong Kong dollars.