HONG KONG, Jan 24 (Reuters) - Hong Kong's home prices fell 0.7% in December and 7.1% in 2024, government figures showed, as the property market struggles to find a bottom despite interest rate cuts and government support measures.

BY THE NUMBERS

Private home prices fell 0.7% in December from the month before, following a revised 0.03% rise in November and a 1% increase in October, data from the Rating and Valuation Department showed.

Prior to October, prices had declined for five months straight.

For the full year of 2024, prices dropped 7.1%.

WHY IT'S IMPORTANT

Home prices in Hong Kong, one of the world's most unaffordable cities, have tumbled nearly 30% from a 2021 peak, hurt initially by higher mortgage rates, easing demand as many professionals left the territory and a weak market outlook.

Authorities tried to prop-up the ailing sector in 2024 with measures such as lifting all property purchase restrictions and relaxing down payment ratios. But housing demand has remained soft, especially in the secondary market.

MARKET COMMENTS

Realtors forecast home prices in 2025 will rise or fall by 5%, depending on the pace of official rate cuts and the severity of trade tensions between China and the U.S..

"With interest rates and housing inventory coming down, the second half of the year may see a more obvious price rise," said Martin Wong, director of real estate consultancy Knight Frank.

CONTEXT

Major banks, including HSBC 0005.HK and Bank of China (Hong Kong) 2388.HK, lowered their best Hong Kong lending rate in December by 25 basis points for the third time this year, following the U.S. Federal Reserve's move.

The territory's currency is pegged to the U.S. dollar, but local banks make their own rate decisions.

(Reporting by Clare Jim; Editing by Neil Fullick)

((clare.jim@thomsonreuters.com;))