Hong Kong is showing signs of a housing correction, compounded by the US-China trade dispute and the first interest-rate increases for the city in over a decade, Bloomberg reported.  

The number of mortgage applications in the Chinese SAR in September stood at 7,977, marking its biggest month-on-month slump in 20 years, according to Centaline Mortgage Broker Ltd.

Luxury sales have been on a downward slide as well, while agencies increased staff cuts and individual properties suffered substantial price markdowns.

The value of new-home transactions in October stood at HKD12.5 billion (USD1.6 billion), the lowest in six months, Bloomberg added, citing data from Midland Realty.

The number of transactions also fell 43% on the month to 1,140.

“We’re now in a correction like the one we had during 2015 to 2016,” Cusson Leung, JPMorgan Chase & Co.’s head of property and conglomerates research in Asia, said. That period saw home prices plunging 13%.

The Hong Kong Monetary Authority needs time to assess if a downward cycle would warrant loosening of curbs, according to Chief Executive Norman Chan.

“A lackluster stock market and the China-US trade war have led to a wait-and-see attitude for both investors and end-users,” said Derek Chan, Ricacorp’s head of research.

Declines in mortgage applications can also be attributed to the readjustment of new mortgage rates by banks in August, according to Ivy Wong, managing director at Centaline Mortgage Broker.

Via property-report.com