Hong Kong's CCL Property Index Slips 0.43% Amid Market Caution

Hong Kong's secondary housing market saw a minor pullback last week, with a key property index declining after recent gains. Despite the weekly dip, prices remain near a three-year peak, and the underlying upward trend is expected to persist, according to analysis from Centaline Property.

Weekly Price Fluctuation

The Centa-City Leading Index (CCL), a widely watched gauge of secondary private residential prices, registered 161.33, a week-on-week decrease of 0.43%, according to a report from Yang Ming-yee, Senior Co-director of Centaline Property's research department.

Despite the single-week softening, the index remains at its fourth-highest level in 157 weeks (over three years), holding firm above the 161-point mark. The latest reading reflects recent market volatility, with the index recording three increases and two decreases over the past five weeks.

Market Dynamics and Outlook

Centaline attributes the current price consolidation to a "tug-of-war" in the secondary market, as potential buyers adopt a wait-and-see approach ahead of the government's mid-September Policy Address and the U.S. Federal Reserve's upcoming interest rate decision.

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However, the agency noted countervailing factors supporting the market, including some former renters entering the market to buy and a willingness among certain buyers to bid up prices for desirable properties. Consequently, Centaline believes the short-term upward price trend remains intact, though the pace of growth may slow. The firm's near-term target for the CCL is 165 points.

Index Breakdown by Segment

The weekly decline was driven by mass-market and smaller homes, while the luxury segment showed resilience. Regional performance was mixed, with the New Territories posting declines while Hong Kong Island and Kowloon saw modest gains.

• CCL Mass (mass market): Fell 0.55% to 162.15.
• CCL (small and medium-sized units): Decreased 0.54% to 160.82.
• CCL (large units): Bucked the trend, rising 0.09% to 163.88, reaching a new high for the past 152 weeks (nearly three years).
• Regional Performance: The New Territories East index fell 2.22%, its largest weekly drop in 34 weeks, while the New Territories West index declined 1.31%. In contrast, Hong Kong Island edged up 0.04% and Kowloon rose 0.42%.