Overall Property Sales In Hong Kong May Hit Lowest In Nearly 3 Decades
HONG KONG – Given that 1st half of the year was impacted by harsh COVID-related measures, while the 2nd half was negatively affected by interest rate hikes, Centaline Property Agency expects overall property sales in the Chinese territory to plunge to historic lows this year, reported the South China Morning Post (SCMP) on Wednesday morning (5 October, SGT).
The real estate agency has forecasted that overall property sales in Hong Kong may plummet to 65,000 for the whole of 2022. If the projection becomes reality, it will be the lowest yearly tally since 1996, based on government data. The prior record low of 70,503 transactions was seen in 2013.
Centaline Property Agency made this worrying forecast amidst the low number of property sales during the first 3 quarters of 2022.
“In the first nine months of the year, there were 47,886 total sales of residential, parking, industrial, and commercial properties with a combined value of HK$465.9 billion [US$59.4 billion],” noted the agency’s Senior Research Associate Director Wong Leung-sing.
“The number of transactions [for the entirety of 2022] could be lower by 36.6 percent, while the value will decline by 34 percent compared to 2021,” forecasted Wong.
Notably, Hong Kong implemented its most stringent quarantine measures against COVID-19 during the beginning of 2022. The draconian measures not only severely affected businesses, it also effectively ground the real estate market to a halt, with very few marketing events being held for new property launches.
Aside from that, the city’s central bank has been hiking interest rates since March 2022 after the US Federal Reserve raised its interest rates.
As a result, the Hong Kong Monetary Authority’s (HKMA) base rate has been hiked 5 times this year to 3.5 percent – the highest in 14 years. Lenders like Bank of China and HSBC raised their prime rates in September to a 4-year high, making it more expensive for people to obtain funding for property purchases, including residential units.