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HONG KONG (June 28): Hong Kong private home prices, the most unaffordable in the world, extended gains for a fifth consecutive month in May, official data showed on Monday, helped by a recovering economy and expectations that Chinese buying will keep prices firm.

An index of home prices rose 0.6% last month, according to the data, compared to a revised 0.4% gain in April. The index has climbed 3.6% so far this year, and is off just 0.8% from its all-time high hit in May 2019.

Property consultants expect home prices will break the record high in the third quarter, and the index will gain a further 5% in the second half.

“We expect that with the resumption of cross-border travels in the second half of this year, mainland buyers will inject momentum into local property sales,” said Cushman & Wakefield Greater China vice president Alva To.

As the property market picked up pace, developers have been accelerating the rollout of new launches, driving up the overall transaction volume.

Cushman & Wakefield expected total home transactions in the first half will increase to the highest since 2012.

New World Development’s latest batch of 173 units rolled out earlier this month in a New Territories project received 30,600 registrations of intent from potential buyers, the highest ever in Hong Kong.

A four-bedroom apartment in the project was auctioned off at a square foot price of HK$35,000 (US$4,508.86), also the highest so far in the suburban area.

A report from think-tanks Urban Reform Institute and Frontier Centre for Public Policy ranked Hong Kong the world’s least affordable housing market for the 11th straight year in 2020, based on median property prices and household incomes.

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