Hong Kong property prices expected to fall by another 10%
Jan 12, 2023
Hong Kong
By   Internet
  • City News
  • Property sector
  • property investment
  • property market
Abstract: With interest rates set to rise further before the middle of the year, general residential property prices are still expected to face downward pressure, with property prices estimated to fall by 5% to 10% for the year as a whole and stabilise in the second half of the year.

According to Lee Yuen-yan, Head of Research at Colliers Hong Kong, with the relaxation of epidemic prevention measures in the fourth quarter of last year, and the formal resumption of customs clearance with the Mainland in the first quarter of this year, coupled with the SAR government's supportive policies to attract talent and foreign investment, Hong Kong is finally back on the recovery track. She is optimistic that the retail and office markets will be the first to recover in the post-epidemic period this year.


The bank expects the return of visitors to Hong Kong after the resumption of customs clearance to boost shop rentals, with rents for first-line shops rising by around 8%, while rents for Grade A and industrial buildings are expected to rise by 3% and 2% respectively.


According to Katherine Ng, Head of Retail Services at Colliers Hong Kong, the increase in arrivals in the coming months, coupled with a strong local consumption market, will help the first-line retail business to rebound steadily, with rents expected to rise by 8% year-on-year.


Local consumption will continue to be the main driver of the overall Hong Kong retail market over the next 12 months, with quality daily necessities, medical-related retail and family entertainment categories set to continue to grow.


DTZ also released its 2022 Review and 2023 Outlook for the Greater Bay Area residential and commercial property investment markets yesterday.


DTZ Greater China Vice President and Head of Strategic Development Advisory, Greater China, Mr. Tao Yuhong, said that with the significant adjustment of the Mainland's epidemic prevention measures and the resumption of quarantine free customs clearance, it is expected to bring positive news to the residential and investment markets in the Greater Bay Area, which is believed to drive the overall market atmosphere and transaction volume to gradually rebound, and the decline in property prices is expected to be narrowed and property prices will remain stable throughout the year.


Tao Ruhong said, the resumption of regular customs clearance may be the first to drive Hong Kong people north to repossession and complete the transaction before the epidemic, and the user-led market, the volume of transactions may not immediately appear in the first quarter of the V-shaped rebound, I believe the overall Greater Bay Area property market to the second half of 2023 to regain upward momentum, the total number of transactions is expected to rise 20% to 25% for the year.


In terms of residential prices, some cities recorded an increase in first-hand transaction prices, but this was mainly due to the fact that the supply and pre-sales of first-hand properties were concentrated in premium property types, thus pushing up the average first-hand property prices, but not many actual transactions.


In terms of second-hand prices, in Shenzhen, for example, which is an indicator, according to the Bank's Shenzhen Mid-to-High-end Second-hand Residential Property Price Index, second-hand property prices have fallen by more than 5% from their 2021 highs, but it is believed that with the relaxation of epidemic prevention restrictions in the Mainland, the decline in property prices is expected to be gradually narrowed and property prices are expected to remain stable this year.