Hong Kong home prices post record-breaking growth in 2017

Tuesday, 6 February 2018 00:00 - - {{hitsCtrl.values.hits}}

Hong Kong (Reuters): Hong Kong’s private home prices surged to a fresh peak for the 14th straight month in December 2017, bringing the increase for 2017 to 16.7% and likely adding to concerns about housing affordability in the city.

A government monthly index shows home prices rose 1.41% in December 2017 compared to November 2017, extending a marathon trend of price increase that began in April 2016.

The provisional annual index rose 16.7%, while the December figure rose 14.8% year-on-year.

Rents also shattered records for the 10th month, edging up 0.27% and rising 7.89% year-on-year. The 2017 figure increased 8.56% when compared to 2016.

Analysts expect the financial hub’s property prices to lift a further 5 to 20% in 2018 partly due to high liquidity and a severe supply-demand imbalance.

The Asian financial hub has one of the most expensive property markets in the world, with the average cost per square foot of an apartment about HK$ 12,100 ($ 1,547.31), according to property agency Midland Realty. On the prime Hong Kong Island, the average cost is about HK$ 16,200 per square foot.

High property costs have spurred political discontent in the city and pushed more people into semi-illegal partitioned flats or onto the streets.