Hong Kong mass residential prices to increase by 3-5% this year
Meanwhile, luxury home prices could grow by up to 3%.
A total of 6,202 residential transactions were recorded in Hong Kong in May, up 59.1% MoM and the highest since July 2021, with consideration rising 65.1% to HK$58 billion.
A report from Knight Frank says the primary market continued to heat up, with a 478.3% MoM increase to 1,492 transactions, supported mainly by brisk sales of newly launched projects in spite of US interest rate hikes. The first phase of Silicon Hill, in Pak Shek Kok, by Sun Hung Kai Properties received over 3,200 tickets for its first batch of sales, representing an oversubscription of about 17 times. All 170 homes in the price list were sold, showing buyers’ confidence in the residential market.
Here’s more from Knight Frank:
The luxury segment, in contrast, was relatively quiet. More homebuyers were holding back their buying decisions amid the economic uncertainty, volatile stock market and concerns about interest rate hikes. That said, a handful of transactions worth over HK$200 million were still recorded. One example that captured the market’s attention was a HK$334 million deal at Dukes Place, in Jardine’s Lookout. A 4,178-sq-ft-triplex unit was sold for about HK$80,000 per sq ft.
On the leasing front, local demand remained the core driver amid the continued border closure. One notable transaction was a 3,838-sq-ft unit in Tavistock, in Mid-Levels Central, which was leased for HK$250,000 per month. There was more supply of rental homes in the market. As the summer holiday is approaching, near-term leasing demand from students in areas in close proximity to universities is expected to rise.
Going forward, thanks to resilient local demand, together with attractive prices offered by developers, purchase sentiment in the residential market is expected to be buoyant, in particular in the primary market. The extension of the East Rail Line has improved connectivity between the New Territories and Hong Kong Island, providing support for properties along the East Rail Line. With improving market sentiment, driven by primary sales, we expect mass residential prices to increase by 3% to 5%, and luxury residential prices to increase by 0% to 3% this year.