With Hong Kong property prices continuing to decline and a high interest rate environment, the situation of owners defaulting on their mortgage payments has worsened, leading to a rise in the number of properties being auctioned off by the courts for the third consecutive month. According to the latest data from Centaline Property, the number of properties auctioned in August has reached 344, breaking the record of 316 set during the 2008 financial crisis, marking a nearly 17-year high with a total value exceeding 3.5 billion Hong Kong dollars. Of these, more than 40% of the auctioned properties come from financial companies, with a significant increase in the proportion of properties involving high-interest second mortgages.
Centaline Property’s Vice Chairman and President of the Residential Department in the Asia-Pacific region, Chen Wing-kit, pointed out that after the government fully repealed the “harsh measures” at the end of February this year, the property market experienced a temporary rebound. However, as the effectiveness of the repeal diminished, the market quickly declined again, leading to a resurgence in the number of properties being auctioned off.
Statistics from Centaline show that as of August 28, the number of properties being auctioned has increased from 262 in March to 344. Compared to the same period last year, there has been an increase of over 30%, with a total value exceeding 3.5 billion Hong Kong dollars. Of these, 251 are residential properties, accounting for 73%, while the rest are commercial properties, parking spaces, and land lots. The majority of the residential properties auctioned off are priced below 10 million Hong Kong dollars, making up over 80% of the total.
It is worth noting that property prices fell by 23% between March and December in 2008, and currently, prices have dropped by over 27% from their peak in August 2021, surpassing the decline seen during the financial crisis.
Chen Wing-kit stated that with the slow economic recovery and no signs of interest rate cuts yet, the upward trend in property auctions is expected to continue. He hopes that the upcoming October Policy Address will introduce measures to stabilize the real estate market and prevent further deterioration.