Hong Kong developers CK Asset Holdings Ltd. and Sun Hung Kai Properties Ltd. are lowering prices for their new residential project at a time when further interest rate hikes weigh on the housing market.
(Bloomberg) — Hong Kong developers CK Asset Holdings Ltd. and Sun Hung Kai Properties Ltd. are lowering prices for their new residential project at a time when further interest rate hikes weigh on the housing market.
The companies are offering discounts of more than 10% for some units in the residential complex Grand Jete, updated price lists from Wednesday showed. CK Asset and Sun Hung Kai didn’t immediately respond to requests for comment.
Prices in the financial hub could decline over the rest of the year, according to a Bloomberg Intelligence note. That would reverse a nascent recovery in Hong Kong’s property market, which saw its worst slump in more than a decade last year.
The Hong Kong Monetary Authority’s recent intervention to boost the local currency could prompt further interest rate increases, dampening a home price recovery of more than 7% since the beginning of the year.
“More developers could offer discounts on their mass-market projects to boost sales due to ample new home supply in the pipeline,” Bloomberg Intelligence analyst Patrick Wong said. He expects home prices to drop about 5% if mortgage rates hit 4% later this year.
The current mortgage rate is about 3.44%, according to an index from mReferral Mortgage Brokerage Services.
Other analysts also see headwinds. S&P Global Ratings forecast in March that prices may only rise slightly or remain unchanged for the rest of the year due to high inventory and a potential supply spike next year.
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