Hong Kong property prices are now in free fall
Hong Kong’s residential property price index dropped 7.31% (-9.91% inflation-adjusted) during the year to end-Q1 2016, a sharp turnaround from an annual increase of 19.61% (-14.62% inflation-adjusted) during the same period last year, according to the Ratings and Valuation Department (RVD). In fact, it was the steepest y-o-y decline in almost seven years. Quarter-on-quarter, residential property prices fell by 5.19% (-5.93% inflation-adjusted) in Q1 2016.
Surprisingly, smaller-sized properties had the biggest price falls. Prices of apartments smaller than 40 sq. m. plunged by 14.3% during the year to Q1 2016, and apartments 40-69.9 sq. m. dropped by 10.9%. Prices of apartments 70-99.9 sq. m. rose by a meager 0.7%, while prices of apartments 100-159.9 sq. m. declined by 6.7%. On the other hand, apartments with sizes bigger than 160 sq. m. were relatively unscathed, with prices rising by 8.6% y-o-y in Q1 2016.
