According to the "2024 Hong Kong Real Estate Market Analysis" report released by Pujin Group, the comprehensive withdrawal of the spicy policy temporarily stimulated the overall real estate transaction volume, but it was limited to the primary residential market. The overall residential housing prices had a brief and slight rebound due to the related measures, and gradually fell back to the pre-spicy level starting from April. The bank predicts that as the overall market purchasing power may have been digested early, it is believed that the atmosphere in the residential market in the second half of the year will become flat. With the opportunity for mainland buyers to return to the Hong Kong local property market, the performance of the luxury housing market is expected to be better than that of small and medium-sized residential properties.
According to the data from the Hong Kong Land Registry from March to May this year, there were 7,069 transactions of primary residential properties, up about 63% year-on-year, while the transaction volume of secondary residential properties only slightly increased by about 0.5% year-on-year to 10,999. The bank's analysis shows that the current number of unsold primary residential units is still at a high level of 21,000 in recent years. In addition, the high mortgage interest rates still suppress citizens' consumption and investment intentions. It is expected that the market atmosphere will be stable in the second half of the year and the transaction volume of the real estate market will slow down.
It is worth noting that the comprehensive withdrawal of the spicy policy has attracted mainland buyers to re-examine the Hong Kong property market, and some high-priced transactions of primary luxury housing projects can still appear recently. At the same time, the supply of Hong Kong's luxury housing market is relatively tight, and units with larger areas are more favored by mainland buyers, so it is estimated that the performance of the luxury housing market this year will be better.
The report also pointed out that there is not much change in the non-residential property market, but the office market is slightly inferior. The situation of oversupply of relevant floor areas continues. Especially for high-quality Grade A office buildings, the overall situation is dominated by digesting surplus supply, so office rents are expected to continue to be under pressure.
As for the commercial property market, due to the continuous increase in visitors to Hong Kong and the current rent level still being about 70% to 80% lower than the peak period, many mainland catering companies have been attracted to settle in, and many well-known retailers have relocated to improve the vacancy rate of commercial properties in core areas. At present, the relevant ratio has fallen to a unit number, which is the lowest level after the epidemic. On the other hand, the vacancy rates of commercial properties in Livelihood areas such as Yuen Long and Sheung Shui, and under the management of the Hong Kong Housing Authority, have all increased. The reasons include the sustained trend of Hong Kong residents' consumption in Mainland China, the decline in the turnover of Livelihood area commercial properties, and the fact that some merchants were forced to transform or close down, leading to an increase in the vacancy rate.
The bank predicts that the demand for commercial properties in Livelihood and second- and third-tier areas will continue to decrease, putting pressure on rental performance, while the rental performance in core areas, especially on first-tier streets, will remain stable under the drive of actual demand.
Edited by Jeffrey