HONG KONG, March 29 (Reuters) - Hong Kong private home prices rebounded for the second straight month in February, rising 1.3 percent on solid demand and easing expectations for a further interest rate hike this year.
The February price gain in one of the world’s least affordable property markets compared to January’s revised 0.25 percent increase, government data showed on Friday.
The February increase was higher than expected, said property consultancy Knight Frank, adding it now expected home prices to drop 5 percent this year compared to its previous forecast for a 10 percent fall.
“The current market is relatively stable, but it’s too early to say whether the prices have bottomed out yet,” said Thomas Lam, executive director of Knight Frank.
Hong Kong home prices fell from August to December last year after rising for 28 consecutive months.
Over the past decade, ultra low interest rates, limited housing supply and large capital flows from mainland Chinese buyers have pushed housing prices up more than 200 percent.
In February, a flat of 60 square metres (646 square ft) on Hong Kong Island cost an average of HK$10.58 million ($1.35 million), according to official data.
Not all analysts believe the city is facing a correction in prices this year.
JP Morgan Asia Pacific equity research managing director Cusson Leung said he expected a 5 to 7 percent rise from current levels, supported by improved liquidity.
“The two corrections in the Hong Kong property market over the last three years were both driven by a decline in the Hong Kong monetary base, which we believe is unlikely to happen this year,” he said. ($1 = 7.8499 Hong Kong dollars) (Reporting by Clare Jim; Editing by Darren Schuettler)