HONG KONG (Feb 16): Global commercial real estate services company Cushman & Wakefield expects the Hong Kong residential property market to continue its downward trend.
According to Cushman & Wakefield’s 4Q2015 Hong Kong Investment Snapshot report, many potential buyers are still having a wait-and-see attitude due to the large amount of incoming supply, which has caused a stagnation of the primary market.
“Developers will continue to offer initiatives and financial plans to attract home buyers. Hence, the first hand market will remain to be the focus of the Hong Kong residential market, despite the overall residential market outlook not being positive,” the report showed.
Some of the negative factors that have been affecting the Hong Kong residential property market are weakening economic conditions as well as the impact of the US interest rate hike, which has caused potential buyers to expect future consolidation in property prices.
Under these conditions, only 10,169 units changed hands in the last quarter of 2015 — total transaction volume reached 55,982 in the year, which was only 10.5% higher than the record low of 2013.
Meanwhile, the luxury residential sector was also quieter in 4Q2015, with deals dropping by over 60% from the previous quarter.
“However, as landlords in this segment have greater holding power and are offering less concessions, price performance has been more resilient in the luxury sector,” Cushman and Wakefield shared.
Nevertheless, the firm believes the growing concern on local economic conditions could cause overall transaction volume in the residential market to remain low in the future.