Hong Kong’s Home Market Perks Up

The Hong Kong property market presents a strong buying opportunity while some uncertainties remain pertaining to interest rates and economic growth locally and globally, experts say.

“This year shall be a better timing as Hong Kong’s economy shall recover gradually, benefitting from the border reopening and ease of Covid restrictions,” said Franky Cho, Chief Operating Officer at List Sotheby’s International Realty in Hong Kong.  “And in particular in the first half, with the uncertainty of U.S. inflation that affects interest rates and investment sentiment, property owners still are more willing to accept a certain degree of price reduction now,” he said. 

In 2022, Hong Kong’s existing-home prices fell 15.6% year over year—the largest annual decline since the Asian financial crisis in 1998—which also ended a 13-year streak of positive price growth, according to data from Hong Kong’s Rating and Valuation Department. 

In January, the existing-home price index rose 2 points, or 0.6% from last December to 336.1, the largest monthly increase since April 2022. The growth rate is expected to pick up in the coming months—with some even predicting a V-shaped recovery—as a steady influx of buyers and investors rekindled transactions. That could mean a short window for buyers to get in before prices take off again. In January, the total transaction volume—including new and existing homes—reached 3,051 units, a 21.7% month-over-month increase. The combined value also rose 0.6% compared to December, according to the latest data from JLL in Hong Kong.

Nevertheless, mainland Chinese buyers are the key drivers in the Hong Kong property market, especially in the luxury sectors, Cho said. Due to the exodus of mainland buyers, the volume of residential sales valued at or above HK$20 million (US$2.55 million) dropped 65% year over year in the first 10 months of 2022, the lowest level in nine years, according to JLL’s latest data available. 

As part of its economic stimulus plan, Hong Kong’s government is giving away 500,000 free airline tickets to attract visitors back to the city. The plan, called Hello Hong Kong, unveiled in early February and open for drawing now, costs the city an estimated US$255 million, but will help revive its tourism and other industries, including real estate.