Estate agents forecast that home prices will climb at a slower pace at 5 percent in the second half of the year, while the home purchase affordability ratio would likely worsen to 70 percent next year.
Centaline Property yesterday forecast home prices for the year to increase 17 percent, with a 12 percent increase in the first half, according to Wong Wai-hung, chief executive, Asia Pacific of the group.
The burden of mortgage payments for homebuyers will intensify in the future mainly driven by the increase in the housing price and interest rate, said Sharmaine Lau, chief vice president of Mreferral Mortgage Brokerage Service, a joint venture of estate agency Midland Holdings (1200) and conglomerate CK Hutchison Holdings (0001).
The one-month HIBOR, which is linked to the mortgage borrowing costs, climbed for the twelfth day to 1.58 percent, near a decade high.
"The home purchase affordability ratio has risen to 60 percent currently, creating a record high since 2009, and it is likely to approach to 70 percent in 2019," Lau said.
Mreferral predicted that there was a fairly good chance that US Fed will raise interest rates by 0.25 basis points once again in the second half of 2018.
"There is no doubt that the Fed will hike 0.25 percentage points interest rate on Wednesday night [yesterday], while it is believed that HKMA will raise the base rate by 0.25 percentage points following the same step of it within this year," said Lau.
Meanwhile, the average price in Tung Chung Cresent rose to 14.6 percent to HK$13,749 per square foot in May, compared with the previous month, the largest percentage increase among the 100 major private housing estates in Hong Kong. A recent transaction in the development involved a 531-sq-ft flat that changed hands at HK$7.45 million, or HK$14,030 per sq ft. Wyler Gardens in To Kwa Wan meanwhile, recorded an 11.9 percent increase in average prices, followed by Laguna Verde in Hung Hom at 11.5 percent.