Hong Kong House Prices May Fall 30% on Rates, Barclays Says

Hong Kong home prices are likely to fall as much as 30 percent as banks increase mortgage rates, according to Barclays Capital Asia Ltd.

The “debt-fueled property price rally since mid-2007 is entering its last leg,” Andrew Lawrence and Jonathan Hsu, analysts at Barclays, wrote in a report today. “While we do not expect a near-term correction, rising mortgage rates hold the potential for a price correction into 2012, driven by reduced affordability and purchasing power for new buyers.”