Hong Kong mass residential prices could hit new highs this year

Consumer sentiment is likely to turn positive in the second half of 2022.

Overall residential prices in Hong Kong were still at record highs despite declining slightly in the first half of the year. 

According to Knight Frank, with the pandemic situation under control and the leadership of the new government, the sentiment in the property market is expected to reverse in 2H, with mass residential prices rising by 3-5% throughout the year, and a chance to reach a new record high. 

Here’s more from Martin Wong, Director and Head of Research & Consultancy, Greater China:

Although the investment sentiment in Hong Kong is improving, given that overseas and Chinese mainland buyers are the major purchasing power to support the luxury segment, luxury residential price growth will slow down to 0-3% Y-O-Y due to border restrictions and quarantine requirements.

Hong Kong may follow the US to raise interest rates in 2H 2022, but the actual interest rate will remain below 2%, which will have little impact on the overall purchasing power of the market and will only affect a small number of first-home buyers. 

We expect the total transaction volume to adjust to 55,000-58,000 units in 2022, with primary transactions accounting for 25% of the total. Due to the slow progress of the government land sale in 1H 2022, the annual land sales revenue is expected to fall back to HK$50-70 billion, while land premiums are expected to reach HK$40-50 billion for the year.