Transaction volume for residential units is projected to increase 43% YoY in 2024.
The volume of Hong Kong’s first-hand sales in the market has surged significantly after the removal of all property cooling measures.
According to Hannah Jeong, head of Valuation and Advisory Services in Hong Kong at Colliers, there was a 308.4% MoM increase in sales volume and a 67.2% MoM growth to 3,971 in first and second-hand residential units.
Jeong also projected a 43% YoY increase in transaction volume for residential units in 2024.
“Even there might be a delay in the US Fed’s rate cuts, the residential market revives due to the lift of the cooling measures and the current property price level,” she said.
Moreover, the rental market has also improved by 5.6% YoY due to an influx of talents in the region.
“Whilst developers adopt prices that are close to or below market prices, thereby triggering purchasing power among property investors and end-users,” she noted.
Citing data from the Housing Bureau, Jeong said there are 20,000 completed but unsold units and 71,000 unsold units under construction, both reaching record highs.
“This will give pressure to second-hand market, further slowing down the transactions,” she said, adding if rate cuts are below expectations, there is a forecast of a further 5% to 10% downward price adjustment in 2024.
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According to data from the Rating and Valuation Department, the housing sector in Hong Kong consists of 1,269,831 independent domestic units, excluding certain specialized types like village houses and dormitories.
In 2023, completions decreased by 35% to 13,852 units, with Kowloon contributing 50% and the New Territories 44%.
Take-up in 2023 increased by 12% to 15,670 units, reducing the year-end vacancy to 4.1% of total stock. However, 5,042 units lacked compliance certificates.
For 2024 and 2025, completions are expected to increase to 22,267 and 25,531 units, respectively. The majority of new supply is expected to come from Kowloon and the New Territories.
Projected completions for 2024 and 2025 are 22,267 and 25,531 units, respectively, with Kowloon City leading in both years.
Secondary market prices experienced a 7.2% decline in 2023 due to financial constraints and economic uncertainty, contrasting with a 5.1% increase in the rental market during Q4.
