Housing Transactions in HK Plummet in June

The Land Registry just released the data of the Number of Sale and Purchase Agreement of Residential and Non-residential Building Units (NSPA) of June 2019 HK. The total number of housing transactions in June was 4,627 only, which drops about -40% mom (8,208) and -30% yoy (6,713).

It is not just a plummet of housing transactions but one across the board for all types of building units. The total NSPA of June 2019 HK was only 6,211, in comparison with 10,353 in May (-40.0% mom), and 9,252 in June 2018 (-32.9% yoy). Similarly, the amount of transactions (considerations) was only HKD53,818 million in June 2019, which drops -40% mom and -33.4% yoy. (Figure 1, Land Registry, 2019)

Thus, the cause(s) of the plummet should not be confined to housing markets, but more likely an external cause. It is quite reasonable to assume that it is related to the political rallies in June on the Amendments of the Fugitive Offenders Ordinance. If thats the case, then it has not taken into account the July 1 storm! The next month figure may be worse.

Image for post
Image for post
Figure 1 NSPA June 2019. Source: Land Registry HK

Since it takes two months for the government to release the housing price index of June, so it may have to wait until August before we know the impacts on housing prices. However, there have been many studies confirming that number of transactions is strongly and positively correlated with housing price (with lags), a smaller magnitude plummet of housing price in July or after can be expected, even though I have found that the correlation is weakened in recent years due to the government’s stronger interventions, including the various types of stamp duty. (Yiu, 2019)

Unfortunately, there is no daily transaction data available, Event Study is thus unable to be conducted. The frequency of impactful political events is also much rarer than impactful economic events, a robust event study may not be viable. If you have any good ideas that can test scientifically on the relationship between the two, please do not hesitate to leave your comments below.

Let’s check in August whether my hypothesis is valid, and how strong is the correlation this time.


Land Registry (2019) Current Monthly Statistics June 2019. http://www.landreg.gov.hk

Yiu, C.Y. 姚松炎 (2019) 辣招打破供求律:成交跌、價反飊。信報財經月刊 503,2月,74-77。or Yiu, C.Y. (2019) The Impacts of Government Interventions on Market Efficiency — a case in HK Housing Market, Medium July 7. https://medium.com/@edwardyiu/evidence-of-government-interventions-distort-market-efficiency-a-case-in-hk-housing-market-55df64dc2b17

ecyY is the Founder of Real Estate Development and Building Research & Information Centre REDBRIC

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store