Home Realestate China’s reopening set to boost Hong Kong’s property market

China’s reopening set to boost Hong Kong’s property market

by Enochadmin

China's reopening will boost many sectors in Hong Kong's property market: Real estate services firm

In gentle of China’s reopening and easing of Covid guidelines, Hong Kong’s property market can be on a path to restoration in 2023, based on property consultancy Colliers Hong Kong.  

The retail market specifically will reap the “finest profit,” Hannah Jeong, Colliers’ head of valuation and advisory companies, informed CNBC’s “Squawk Field Asia” on Thursday.

Nevertheless, there are nonetheless some potential headwinds this yr that will undercut Hong Kong’s restoration, Colliers mentioned in its latest report. These embody continued geopolitical pressure and a possible international recession.

“We’re taking a look at a extra cautiously optimistic view for 2023,” Jeong added.

“There can be totally different uncertainties from exterior elements however borders opening is definitely the one of many booster[s] for a lot of different sectors inside the property market.” 

Retail to be ‘first runner’

Hong Kong's retail market is gradually 'gaining composure,' says Sunlight Reit

“The shifted shopping pattern of the Mainlanders over the last three years may paint a new picture to the new retail market sentiment,” it added. 

In the office sector, Grade A office rents will bounce back by 3% this year, said Colliers — thanks to “pent-up demand from Chinese and overseas companies.” 

Even so, Jeong said that Hong Kong’s office market still has a high vacancy rate, at 14.7%.

“But it’s not it’s not the end of the world because … compared with other peer cities, 8% to 10% is a generally reasonable number,” she added. 

Residential market demand to dampen 

We're no longer expecting a 'huge drop' in Hong Kong property prices, MIB Securities says

“But in 2023, I think the interest rate … will continue to go up. We are looking at stabilization at least in the second half of this year.”

Just last month, Hong Kong raised interest rates by 50 basis points to 4.75%, following the U.S. Federal Reserve.

High costs of borrowing will dampen residential market demand and a “negative 5% to 10% downward adjustment” should hence be expected this year, Jeong said. 

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