Home prices fell by 1.2 percent in May, according to official data released on Wednesday.

The drop followed two consecutive months of increases.

Prices in May were 12.7 percent lower than the year before.

Figures from the Rating and Valuation Department also showed a one percent increase in rental prices, which reached a four-and-a-half year high.

It's the first time home prices have reported a decrease since Financial Secretary Paul Chan announced the scrapping of all property-cooling measures in his budget speech in late February.

Martin Wong, the director of real estate consultancy Knight Frank, said the effects of the end of the "spicy" measures have now worn off.

"There seems to be no positive factors apart from the cooling measures news. Because currently the home prices are still being impacted by two negative factors," he explained.

"The first one is the high interest rate environment and the second one is the ample supply for new units. As long as these two factors continue to impact the market, it will stop the home prices from rebounding quickly."
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Last updated: 2024-06-26 HKT 15:15