HONG KONG (Reuters] – The private property prices in Hong Kong fell for the fourth consecutive monthly month in January, to their lowest point since February 2021. Official data was released on Thursday. It happened as the city was struck by a COVID-19 virus.

Prices fell by 1.1% in January, compared with a 0.1% revision for December. This was the 11th largest monthly drop in January.

The property market in Hong Kong is one of the most costly worldwide. It has been resilient to the protests and pandemics over the last two years. This was due to strong demand and lower interest rates.

Before consolidating, its home prices hit a new record in September.

Some real estate agents reduced their year-end price predictions this month due to coronavirus epidemics in Beijing. Also, the government implemented some severe social restrictions that affected many businesses.

Hong Kong Property Services anticipated that prices would drop within the first quarter by about 5%, and rise between 3-5% for full-year after the pandemic stabilizes.

The chief operating officer for Hong Kong Property Services, Dave Ma said that prices recovered all after the fourth wave of epidemics. “Unlike the first epidemic, sellers don’t cut prices as often now. Transaction volumes are greater because buyers are searching for bargains.”

Because of the serious effects that the pandemic had on their businesses, he said that some property sellers sold off properties below market value.

The delay in property developers’ new launches is leading to a decline in the number of new homes being sold. Centaline expects February’s secondary market deal volume to fall 18% from January, compared to January’s 24-month low.

The government has announced a relaxation in the rules to let first-time home buyers borrow 80% of a mortgage on homes that are less than HK$10million. 90% can be borrowed for homes worth HK$10million and lower, compared with HK$8million previously.

Only 50% of buyers are allowed to borrow for purchases that cost more than HK$12million. This is the market size for large and medium-sized homes.

($1 = 7.8087 Hong Kong dollars)