Home prices up for 26th straight month in May

Secondary-market residential prices rose 1.67%.

Home prices in space-starved Hong Kong extended their steep run after rising for the 26th straight month in May, according to the Rating and Valuation Department.

An index of secondary-market home prices rose 1.67% in May although this represents a slower pace of growth than last month’s 1.76% gain. The rental index also inched up by 0.2% over the same period.

Also read: Hong Kong leads global property price growth in Q1

Prices for larger homes, or those greater than 1,722 sq ft on Hong Kong Island edged up by 1.8% to an average of $26,409 psf, reports South China Morning Post.

On the other hand, the price for smaller flats or those less than 430 sq ft, on Hong Kong Island fell 1.95% to $16,744 psf.

Hong Kong recently unveiled a slew of housing initiatives to cool down the city’s overheated housing market including a proposal to tax vacant residential properties by around 5% of property value.

Also read: Vacancy tax may not dampen Hong Kong's runaway home prices

The median monthly income of households which do not own flats ($39,500) will also be used as the basis of the affordability test for the Home Ownership Scheme (HOS).

Additionally, the Starter Homes pilot project will also be launched on a URA site at Ma Tau Wai Road to provide more home options for middle-income families.