HONG KONG: Hong Kong private home prices hit a record high in July, according to revised data, before dropping a tad in August, suggesting one of the world's most expensive property markets is showing little sign of cooling.
The government has doubled down in recent weeks on a long-term pledge to make housing more affordable.
Prices in the global financial hub rose by a revised 0.8 per cent in July, before dipping 0.15 per cent in August, official data showed. The price index of 397.7 for July was a record high and compares with 397.1 in August.
The previous record high was 396.9 in May 2019 before mass anti-government protests and the COVID-19 outbreak.
Prices are up 4.5 per cent since the end of last year, buoyed by a recovering economy and hopes that mainland Chinese buyers will return to the market when COVID travel restrictions are lifted.
In Hong Kong, 7.5 million people are packed into roughly 30 per cent of the territory, with the rest comprising green belts, country parks, woodlands and wetlands where any plans for development have faced tough opposition from environmentalists.
Making housing more affordable has been a priority for all of Hong Kong's leaders since the former British colony returned to Chinese rule in 1997, although the prospect of owning a home is still a distant dream for many.
During a visit to a property showroom in August, Eunice Ma, 50, said she was planning to buy a two-bedroom in a high-end new development close to the mainland China border for her 26-year old son.
"Whether the flat will make a profit or not, I don’t think about it that way, because I purely want it for my son's marriage in the future," she said.
The city also has a serious shortage of car parks, resulting in some spaces fetching huge sums of money. Local media reported earlier this year that a luxury residential development on The Peak sold a parking space for HKUS$10.2 million (US$79 million).
As part of efforts to solve the chronic housing shortage, Hong Kong plans to build artificial islands at an estimated cost of at least HKUS$624 billion.
Betting on the high demand, real estate is still seen by many as the safest investment.
"Keeping the money in a bank doesn’t give you interest, but with an apartment you can at least rent it out,” said Vera Tang, a 50-year old housewife who was looking to use her retirement fund to buy an apartment for investment.