JLL attributed the decline to three factors.
Rising mortgage rates, ample new housing supply and the absence of Mainland Chinese buyers dragged mass residential capital values down by 1.2% QoQ in 2Q23, data from JLL showed.
On the other hand, capital values of luxury residential rose in 2Q23, climbing 1.3% over the last six months.
Overall, JLL said Hong Kong’s housing market is having its “longest price adjustment since 2008 and has not found a bottom,” adding that home prices have experienced a maximum decline of 15.9% from the peak over the last 20 months.
“”Based on observations from previous cycles, current conditions do not warrant a sustainable home price recovery. Given the headwinds surrounding the sector, such as the challenging external environment and looming risks in the financial market, the current down cycle will be longer than previous troughs,” Joseph Tsang, chairman at JLL in Hong Kong, said.
“The government should remove the cooling measures, in particular the measures on stamp duties and remove the mortgage stress test to give flexibility to the banks to assess the mortgage loan risk. The government should also prioritise the development of public housing and refine the policies on HOS secondary market,” Tsang added.
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