Hong Kong home sales pick up but still face headwinds

Hong Kong's home sales uptick is expected to struggle with momentum due to the city's weak economic outlook and elevated interest rates.

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The number of new home transactions in the seven days after Chief Executive John Lee's policy address on Oct 15 rose 20 per cent compared with the same period earlier, according to data from broker Midland Realty.

This comes amid several major launches, such as Sun Hung Kai Properties' new project in Kai Tak. Prices of second-hand transactions rose 0.5 per cent in the week of the policy address, according to Centaline data.

But property agents are sceptical on whether this growth will last. Despite the short-term improvement, Hong Kong faces challenges ahead, with high borrowing costs and poor economic sentiment deterring more people from buying.

"The residential market is greatly affected by interest rates and economic circulation," said Cushman & Wakefield head of research Rosanna Tang. "Coupled with the cautious lending attitude of banks, the stimulus effect on the residential and non-residential investment markets in the short term is limited."