Hong Kong’s Housing Market – A Run Through

The exorbitant cost of Hong Kong’s housing market has always headlined news. Prices have doubled from what they were in 2009, and the city continues its rank amongst the world’s most expensive. However forecasts by researchers predict a screeching halt in price hike, with potential to even fall from 5 to 30% depending on opinion.

Before 2011, the increase in property price was induced by a mismatch between supply and demand. This gap has begun to close and according to the government figures 86000 private homes are under construction as of September 2015. According to estimates, 15000 to 18000 of these saleable units will soon be available for sale, this represents a 40% increase in supply over recent years and this increased supply will naturally limit the ability of developers to charge premiums for new builds.

Researchers also cite various reasons for the incoming drop in home prices in Hong Kong. The stagnating Chinese economy and global trade through Hong Kong, the fall in visitor arrivals from the Mainland – leading to slowing of retail sales in Hong Kong- and the looming interest rate hike by the US Federal Reserve, are plausible causes offered.

Furthermore, the Hong Kong government has undertaken measures to address the relative unaffordability of Hong Kong’s housing sector. Draconian measures have been implemented to curb speculative interests in the Hong Kong housing market. These measures include doubling stamp duty, introducing special property taxes on non-Hong Kong permanent residents and raising down payments for mortgages. The government measures have been somewhat successful and the government is continuing to address the housing problem. The Hong Kong government is also looking to increase the supply of housing by releasing land and developing outlying areas of Hong Kong like East Kowloon and East Lantau shortly.

In spite of all of the above, interest in the Hong Kong real estate sector remains strong. The Mainland Chinese and other savvy investors continue to regard Hong Kong as an eminently desirable destination. For this reason, demand for high-end luxury real estate continued to endure atrophy properties at ultra-luxurious developments around the city, like Opus Hong Kong and 28 Barker, were snapped-up at soaring amounts during 2015.

The exorbitant cost of Hong Kong’s housing market has always headlined news. Prices have doubled from what they were in 2009, and the city continues its rank amongst the world’s most expensive. However forecasts by researchers predict a screeching halt in price hike, with potential to even fall from 5 to 30% depending on opinion.

At Engel & Völkers Hong Kong, our multilingual team of experienced and professional real estate agents seek to guide you as you navigate the city's buoyant and rapidly changing real estate landscape. With local experts and property estate agents in 39 countries around the globe and an impeccable reputation to match, you would be well to partner with Engel & Völkers for all your domestic and overseas real estate needs. Your real estate agent search ends here!