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Hong Kong Housing Market Shows Signs of Stabilization

Second-hand listings decline, suggesting renewed buyer confidence

Hong Kong’s residential real estate market may be finding its footing, as indicated by a drop in second-hand housing inventory. A decrease in available units suggests either increased sales or a reluctance among owners to sell at current prices.

Key Factors Behind the Decline

Data from Centaline Property Agency reveals a 5.3% decrease in available second-hand residential units in Hong Kong from the end of May to the end of June, totaling 34,043 units. This continues a 12-month slide, with a cumulative 12% drop in the first half of the year.

One explanation is that properties are being sold successfully, reducing the overall number of listings. Limited new listings compound the decline, which points to strong market absorption. Sellers are also less inclined to rush to sell, indicating decreased urgency.

Alternative Perspectives

Conversely, some analysts suggest owners might be withdrawing properties after prolonged periods without a sale, awaiting improved market conditions before re-listing. According to the Hong Kong Economic Times, unsold properties can remain on the market for an average of 90 days or more.

Typically, owners reduce prices to attract buyers during market downturns, rather than removing listings. Owners who threaten to withdraw properties are posturing, as the typical behavior involves adjusting prices to secure sales.

Rental Market Influence

Some owners opt to rent their properties instead of selling. With rental yields surpassing Hong Kong dollar deposit interest rates, owners may prefer the steady income from rent. This shift reduces the supply of second-hand properties available for sale, potentially creating a sense of scarcity that encourages quicker purchasing decisions.

Brokerage Insights

Real estate agents on the front lines report increased activity in the housing market. The energy has spilled over into the second-hand market after meeting the needs of the primary market, leading to inventory digestion. Newly listed properties cannot keep pace, which causes a reduction in available properties.

Improving Economic Conditions

Easing international tensions, such as the de-escalation of the conflict between **Israel** and **Iran**, contribute to a more positive outlook. Also, **Trump’s** tariff policies are being met with more reasonable actions, giving people confidence that solutions will arise.

Funds are flowing back into Hong Kong, driving interbank rates down to less than one percent, and mortgage rates have fallen to about two percent. This reduces the financial burden on potential buyers.

Hong Kong stocks have performed well, with the Hang Seng Index rising to 24,000 points, improving market sentiment. The Rating and Valuation Department’s property price index has risen for two consecutive months. Should this trend continue, Hong Kong’s residential market could stabilize further in the latter half of the year.