Residential Real Estate News
Hong Kong Residential Property Prices Drop Twelve Percent in 2022
According to JLL, rapid U.S. rate hikes, a fifth wave of Covid-19 and ongoing weakened economic outlook have triggered the downturn in Hong Kong's housing market in late 2022.
In 2022, mass residential capital values fell 11.6% by the end of November 2022 to the lowest level since March 2018, while luxury residential capital values dropped 4.4% due to weak local demand, absence of non-resident buyers and ample completions.
The total residential transaction volume and average monthly transaction in the first ten months have also dropped to 39,812 and 3,981 respectively, the lowest levels in 20 years. In the high-end residential market, the volume of residential sales valued at or above HKD 20 million dropped 65% y-o-y. The number of transactions also fell to the lowest level in nine years.
The weakening housing demand has led the unsold units of completed projects to surge over 63% to 14,700 in September. Developers began to delay the launches of new projects. Among units with presale consent approved in 2022, around 10,000 units were unsold as of the end of October 2022.
Joseph Tsang, Chairman of JLL Hong Kong said, "A high level of inventory will intensify the competition between developers in launching new projects. Developers will offer deeper discounts to boost sales. The first launched prices of recently launched projects are already 7% to 13% lower than the average price of secondary projects in the same precinct. But the rising mortgage rates will continue to deter housing demand. If the cooling measures in the housing market remain, the trend of the market will rely on whether the full-scale reopening with Mainland China and overseas will give a boost to the local economy or not."
He expects the mass residential capital values will drop further by about 10% in 2023, while luxury residential prices will fall 5 to 10%. However, mass residential prices will drop by only around 5% if the cooling measures are relaxed.
