The Hong Kong property market is not set for a recovery in the near future, with Knight Frank predicting that prices could fall by a further 10%.
- The Hong Kong property market saw property sales fall by 11% in the last year
- Prices dropped for seven consecutive months, with mass residential prices leading the decline with a 11% decrease
- Knight Frank estimate that prices will continue to decline by up to 10% in both the luxury and residential sectors
Property transactions in Hong Kong are down 11% year-on-year, the latest Land Registry figures show.
Residential sales increased by 2% month-on-month, with developers offering deeper discounts and more incentives. A number of primary projects received a positive market response, according to the latest market analysis from Knight Frank.
It points out that prices have dropped for seven consecutive months by a cumulative 11%, according to provisional figures from the Rating and Valuation Department. Mass residential prices led the decline, losing 11% in the period, while luxury residential prices dipped 8%.
With an increase in upcoming supply and the potential of a US interest rate rise in June, residential land prices continued to edge down. A site in Pak Shek Kok, Tai Po was sold last month for an accommodation value of HK$3,620 per square foot, down about 20% from eight months ago when the adjacent site was sold.
Knight Frank expects more mainland buyers to return to the market in the future and points out that a number of primary projects are scheduled for release in June, hoping to reach the market before a possible US interest rate rise.
“While the government restated in May the continued implementation of cooling measures, we do not consider the sales rebound in the past two months an indication of a general market recovery.
“We maintain our forecast of a 5% to 10% drop in the luxury segment and up to a 10% drop in mass residential prices,” the report adds.