Hong Kong’s private-home prices have reached their highest level in 10 years, according to a government index.
The Rating and Valuation Department’s composite private-home price index, which includes all categories of private homes, stood at 297.1 in April, more than triple the 92 level in 2005, Ming Pao Daily reported on Wednesday.
The index has jumped 44 percent since Chief Executive Leung Chun-ying took office in July 2012, the report said.
A separate survey by the department showed a 430 square foot flat on Hong Kong Island cost HK$13,517 (US$1,743) psf in April, up 270 percent from HK$3,638 in 2005.
Leung has promised around 20,000 private housing units will be completed next year, outnumbering the aggregate increase over the past 10 years and helping suppress the rapid growth in home prices.
But Wong Leung-sing, senior associate director of research at Centaline Property Agency, said the new private homes to be added to the market next year were in fact under a plan by former chief executive Donald Tsang Yam-kuen and not by Leung, whose plan to add to the home supply can only be realized by his successor.
Supply is not the main factor affecting home prices, Wong said, noting that other factors such as the macroeconomic environment and demand are equally important.
Lawrence Poon Wing-cheung, a lecturer at the City University of Hong Kong’s Division of Building Science and Technology, said the increase in private home supply will keep residents from rushing to buy homes, and will help push down both rents and home prices.
Poon predicted that increased home supply plus an interest rate rise next year would result in home prices dropping by more than 10 percent.
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