In the first five months of 2019, property transactions in Hong Kong rose to its highest level since 1997, with buyers splashing out HKD343.7 billion on homes, car parks, shops, industrial and office units, based on data from the Land Registry. In May 2019, 10,353 property transactions were concluded, bringing the total number of deals to 37,280 for the first five months.
Buggle Lau, chief analyst at Midland Realty said that the sharp increase in transaction value was mainly due to the strong sales of new flats, with homebuyers spending about HKD121.8 billion on new flats, up 47.6 per cent from the same period in 2018, according to the South China Morning Post.
Property prices also reached an all-time high in end-May, with home values in the city breaking the previous record set last August 2018, Bloomberg reports. A CBRE Group Inc. report in April revealed the city has the highest average home price at USD1.2 million, as well as the highest average prime property price at USD6.9 million.
However, the property outlook for the second half of the year may dampen due to uncertainties from the trade war and stock market volatility.
Joseph Tsang, managing director and head of capital markets at Jones Lang LaSalle (JLL) Hong Kong, said that the performance was unlikely to be repeated as the US-China trade war will result in fewer transactions as the dispute will have an adverse impact on Hong Kong’s economy and affect buyers’ confidence.
“Manufacturers will cut their operation or lay-off workers once they see a contraction in orders on hand from the US,” said It will have profound impact to economy,” said Tsang.
According to JLL’s Year-end Property Market Review and Forecast published today, capital values of Grade A office will drop up to 10% next year after it hits the historic record high this year.
In May itself, the number of office deals dropped 32 per cent to 15—six of which were concluded before trade tensions spiked—according to Midland. Leasing has also slowed down in recent months, as noted by Marcos Chan, head of research for Greater Bay Area and Hong Kong at CBRE. — Construction+ Online
