Marginal monthly growth of overall residential prices in May 2008

Developers and buyers of residential properties remained cautious as buying sentiment was dampened by unstable stock market and mortgage rate rise.

This is according to the Hong Kong Residential Snapshot – July 2008, an overview of the general residential market recently released by Colliers International.

During the one-month period between 16 June and 15 July 2008, 464 residential units were launched in the primary market.  They were mainly the remaining units of the developments that had already been launched in the previous months.  It appeared that developers remained cautious to launch new properties in the primary market. 

According to the University of Hong Kong Real Estate Index Series, the Hong Kong Island Residential Price Index recorded a monthly growth of 1.2% month-on-month (MoM) as at the end of May 2008, followed by the New Territories that registered a growth of 0.1% MoM at the same period.  Meanwhile, only the Residential Price Index for Kowloon recorded negative monthly growth, which was -0.4% MoM.  Overall speaking, the Residential Price Index for all territories in Hong Kong saw a marginal growth of 0.5% MoM as at the end of May 2008. 

"The uninspiring stock market performance and the rising inflation remain the key concerns in local market, dampening the residential buying sentiment," said Ricky Poon, Executive Director, Residential Sales of Colliers International.  "As of now, more households start to feel the loss of their purchasing power due to soaring consumer prices.  Looking forward, the sentiment of residential property market will hinge on the projection whether the stock market prices are to revive in the second half of 2008."

Although the Government announced an HK$11 billion package aiming at relieving the inflation impact on local community, it is expected to create only a short-term positive sentiment in the property market.

For full report, click here to download.