Property prices fall 0.7 percent in May
Property prices dropped in May after rising for four consecutive months, government data showed on Wednesday. The Rating and Valuation Department said home prices fell by 0.74 percent last month from April.  Compared to May last year, prices were down by almost 9 percent. Prices of small and medium-sized flats were 0.8 percent lower than they were in April, while those for large-sized homes fell by 0.7 percent. However, private rents rose by 1 percent. The drop in home prices in May followed a revised 0.4 percent rise in April, according to the government data. Rising interest rates have dampened demand in one of the most expensive property markets in the world, while steep discounts offered by developers on new launches have added pressure on prices, especially in the secondhand market. Hong Kong interbank rates rose further this month, with one-month Hibor, the benchmark used in pricing residential mortgage loans, surging to the highest level since October 2007. Market observers, including Bank of East Asia, have said they expect banks to raise their best lending rates again in July, following a 12.5 basis points hike in May, due to pressure on funding costs. (Additional reporting by Reuters)