Hong Kong’s residential property market powers on after the lifting of COVID restrictions

kathy Lee

Hong Kong’s residential property market has enjoyed a second consecutive month of price growth as the border with mainland China reopened following Covid-19 restrictions, according to Kathy Lee, Head of Research at Colliers Hong Kong.

kathy Lee
Kathy Lee, Head of Research, Colliers Hong Kong

However, Lee added that concerns over geopolitical tensions affecting China’s exports, Hong Kong’s import and export market, and investor confidence amid the US bank crisis could slow the city’s economic recovery. Despite this, Lee said that the market was driven by several factors, including improved sentiment following the border reopening, developers aggressively launching new projects, and the government lowering ad valorem stamp duty on home purchases. Colliers has adjusted its mass home price forecast to more than 8% growth for the entire year, with further growth expected in property prices and transaction volume in March and the second quarter of 2023. Hong Kong’s luxury residential market has also seen signs of recovery across transactions and leasing, according to Steve Lam, senior director of capital markets and investment services at Colliers Hong Kong.

Hong Kong SkylineThe Hong Kong property housing market is one of the most expensive and competitive in the world. With limited space and high demand, prices have continued to rise over the years, even amidst political and economic uncertainty. Hong Kong’s booming economy, strategic location, and developed infrastructure have attracted many international investors and homebuyers seeking a foothold in the region. As a result, the city’s property market has become an integral part of the local economy, contributing to a significant portion of its GDP.

Hong Kong Mansion
The Hong Kong housing market is remarkably resilient.

Despite the impact of the Covid-19 pandemic, the Hong Kong property market has shown resilience and continued to grow in recent months. With the reopening of the border with mainland China, there has been a surge in demand for Hong Kong properties, especially from mainland Chinese buyers. However, concerns about the impact of geopolitical tensions between China and the US and the US bank crisis have cast a shadow of uncertainty over the market.

The Hong Kong government has recently implemented various measures to cool down the property market, including stamp duty hikes, tighter mortgage lending policies, and restrictions on foreign buyers. Nevertheless, these measures have had limited success in slowing down the rising prices of homes, especially in the luxury segment. The high cost of housing has become a major social issue in Hong Kong, with many locals struggling to afford decent housing, leading to calls for more affordable housing policies and government intervention.

Despite the challenges and uncertainties facing the Hong Kong property housing market, it remains a desirable investment option for many local and international investors. With its strong economic fundamentals, strategic location, and world-class infrastructure, the market will likely continue to grow and evolve in the coming years.

 

Kathy Lee MRE Senior Director | Head of Research

[email protected]

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