Home prices in Hong Kong resumed their upward trend last month, after a dip in December, increasing an average of 2.1 percent month-on-month.
Home buyers were returning to the market after the government implemented another set of cooling measures in November, which aimed to curb price growth and property speculations, said property agent Midland Realty, one of the two biggest property agents in Hong Kong.
Centaline Property Agency also said that home buyers decided to purchase sooner rather than later, as they were concerned that home prices would rise at a faster pace after the Lunar New Year holiday.
Buggle Lau Ka-fai, Chief Analyst at Midland Realty, expects the government to implement another series of property measures to slow the price growth. However, he expects the average price of a home to increase 11 percent by the end of 2011.
Midland Realty also noted that the average prices of homes were still 14 percent below the HK$6,208 psf level during the market peak in 1997.
Mr. Lau said that price increases reflected buyers’ positive expectations for the market, despite the measures. Property sales were affected when the government announced measures to cool the housing market in November, when the average home price dropped 0.4 percent month-on-month in December.
Sales of resale homes in Hong Kong’s largest estates climbed 6.58 percent to 729 deals in January, compared with the 684 transactions recorded in December.
“Sales volume has been picking up and prices are increasing as home seekers are gradually digesting the impact of the measures,” said Mr. Lau.
“The continuing low interest rates, pay rises and bonus payments contributed to the improved buying sentiment last month.”
Property sales totalled HK$2.91 billion in January, compared with HK$2.54 billion in December.