Property sales down 10.9% to $63.5b in May

Skyrocketing property prices may have finally dampened demand.

The number of sale and purchase agreements for building units in Hong Kong fell 10.9% MoM to a total consideration of $63.5b in May, according to a government release.

This represents 7,788 sale and purchase agreements.

Residential units still dominated the property sales after accounting for 70.9% or 5,522 units. The total consideration for residential units was $52.2b which represents a 15.6% MoM decrease and 2.6% YoY decline.

Also read: Home ownership plunges below 50% in 2017 as prices skyrocket

The slowdown in property transactions comes as residential prices in the world’s least affordable housing market maintained its steady rise after climbing for the 25th straight month last April.

Also read: Land shortage exceeds government estimate of 1,200 hectares

Private residential prices rose 1.84% MoM which represents the fastest pace in a year as developers shrugged off worries of prime rate hike dampening eager market take up. The rental index advanced 0.42% to 190.3, similarly indicating higher leasing costs.

The number of mortgage applications similarly rose to 14,898 in April as Hong Kongers scramble for ways to finance their home aspirations however the number of approved mortgage loans dipped to 5.6% to $37.3b over the same period.

The median price of residential units in Hong Kong clocks in at around $6.19m in Q3, representing 19.4 times of the annual median income of $319,000 earned by local families. In other words, it takes a family on that income level as long as 19.4 years just to acquire a property.