银行的收紧风险，导致商业贷款大幅减少，进一步限制了市场的投资需求。银行正在重新评估其手上的贷款组合，收回部分抵押物业，此投资环境有利于现金充裕的投资者和用家，能够与陷入财务困境的卖家协商更优惠的价格。First Pacific Davies predicts that Hong Kong Grade A office prices and core street store rents will fall by 5-10% in 2024.
Smart Finance News App learned that the latest investment market report published by First Pacific Davies in August 2024 pointed out that due to the possible further deterioration of Hong Kong bank loan quality in the coming months, they will be more cautious in their loan attitude. Coupled with the high cost of refinancing, this may force more large property portfolio holders to sell some non-core assets at discounted prices. Therefore, the bank expects to see more distressed asset sales in the Hong Kong commercial real estate market in the second half of 2024, and cash-rich buyers will become the main beneficiaries, continuing to look for high-value transactions. First Pacific Davies predicts that Hong Kong Grade A office prices and core street shop rents will fall by 5-10% in 2024.
The report points out that the continued high cost of capital has led to more property investors selling assets at discounted prices. This is because the Fed did not cut interest rates as expected by the market, resulting in the Hong Kong interbank rate (HIBOR) remaining high. Therefore, banks adopt a more cautious lending approach, and the specific classified loan ratio has increased from 1.56% to 1.79%, and borrowers' financing costs have also risen.
The bank's tightening risk has led to a significant reduction in commercial loans, further restricting the investment demand of the market. Banks are re-evaluating their loan portfolios and taking back some mortgage properties. This investment environment is conducive to cash-rich investors and users, who can negotiate more favorable prices with sellers in financial distress.
Tang Zhuoxuan, director of the research and advisory department of First Pacific Davies, said that the continued high cost of capital has led more and more real estate investors to sell assets at discounted prices, but banks are unwilling to provide loans to the commercial real estate market, restricting investment demand, and cash-rich buyers and end-users dominate the market.
Yuan Zhiguang, managing director of First Pacific Davies Investment Department, pointed out that the Hong Kong real estate market has faced major challenges in recent years. The appreciation of the Hong Kong dollar and high interest rates have affected the local economy in Hong Kong, resulting in a decline in tourist spending and disposable income. The rise of new shopping malls in Shenzhen has also diverted some local consumption in Hong Kong to China, resulting in a 50% decline in core street store rents since 2019.
In the 2024 investment market, active buyers are mainly cash-rich private investors and institutions, who have been targeting properties with large discounts and rental yields of 5-6%. Most of these transactions are expected to occur in the suburbs near the border, and there may be more such high-yielding assets in the second half of 2024.
