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Hong Kong private home prices fell at a faster pace in June and hit the lowest level since December 2020 as homebuyers stayed on the sidelines due to an uncertain outlook and rising interest rates.
Home prices in Hong Kong, one of the world’s most unaffordable housing markets, fell 1.1% in June from a month earlier, compared with a revised 0.2% decline in May, according to the official data. Home prices in the financial hub have dropped 3.4% so far this year.
Rates in Hong Kong tend to move in lockstep with US rates, as its currency is pegged to the greenback, although they have lagged the US currency in recent months. But the market expected major banks in the city to raise their best lending rates this week, if the U.S. Federal Reserve raises rates sharply as expected later on Wednesday.
One month Hibor – the Hong Kong Interbank Offered Rate, a benchmark used for pricing mortgages – last week rose to its highest since May 2020.