Hong Kong’s real estate market has been one of the most expensive in the world for years. However, in recent years, the market has experienced significant changes. In this blog, we will examine the changes in the real estate market of Hong Kong over the past five years, using data from various sources.
Real Residential Property Prices
According to data from the Bank for International Settlements, the real residential property prices in Hong Kong SAR have been on the rise since 2018. The graph below shows the trend in real residential property prices from Q4 1979 to Q1 2023 [1]
Hong Kong House Price Index
The Hong Kong House Price Index, provided by the Centaline Property Agency Ltd., shows that the housing index in Hong Kong has been on the rise since 2019. The chart below shows the trend in the housing index from 1994 to March 2023 [5]
Private Domestic Price Index
The Rating and Valuation Department (RVD) releases monthly, quarterly, and annual property price indices by class for private domestic properties in Hong Kong. The private domestic price index, all classes (1993=100), shows that the house prices in Hong Kong have been on the rise since 2019. The table below shows the quarterly change in house prices, inflation-adjusted, from 2013 to 2022 [2]
| Year | Q1 | Q2 | Q3 | Q4 |
|---|---|---|---|---|
| 2022 | -4.2 | 0.2 | -5.9 | -7.9 |
| 2021 | 0.84 | 1.33 | 3.18 | -3.96 |
| 2020 | -0.41 | 2.5 | 1.91 | -2.82 |
| 2019 | 4.84 | 2.6 | -3.7 | -0.97 |
| 2018 | 3.93 | 5.48 | -1.05 | -8.36 |
| 2017 | 4.38 | 4.31 | 1.07 | 2.52 |
| 2016 | -5.48 | 2.94 | 6.24 | 3.12 |
| 2015 | 4.51 | 4.05 | 0.92 | -8.8 |
| 2014 | -1.26 | 2.01 | 4.72 | 2.66 |
| 2013 | 4.27 | 0.46 | 2.11 | -3.51 |
Recent Changes
According to a report by Our Hong Kong Foundation, Hong Kong’s home prices may retreat from 2023 until 2025, amid an expected supply surge of about 20,200 private homes [3][4]. In addition, a Natixis report predicts that the city’s property prices could plummet 25% from its previous peak in late 2021 before it starts to recover. The slump is expected to deepen by 12% in 2023, and subsequently by just 2% in 2024 [5]
Conclusion
In conclusion, the real estate market of Hong Kong has experienced significant changes over the past five years. While the real residential property prices and the Hong Kong House Price Index have been on the rise, the private domestic price index shows that the house prices have been fluctuating. Recent reports suggest that the market may experience a significant drop in prices in the coming years [6].
References
