There is no market recovery on the horizon for Hong Kong, as property sales and rents continue to fall.
- Government data showed investment into the Hong Kong property market has fallen by 9% in a month and 35% year-on-year
- In the past six months of 2016, sales have fallen by 40% and industry experts admit that there is “a tough fundamental outlook”
- The private rented sector saw rents for prime property fall by 6.4%, the second sharpest decrease seen across all world markets
Sales of property in Hong Kong fell 9% in July compared with June, government data released showed.
Agreements of sale and purchase totalled HK$36.1 billion in July, down 9% from June and 34.8% less than in the month of July a year ago. There were 5,354 agreements signed during the month, 11.3% less than in June and 27% less than in July 2015.
Property sales in Hong Kong fell almost 40% in the first half of the year compared with the same period in 2015, in terms of both price and volume.
Josh Crabb, Head of Asian Equities at Old Mutual Global Investors, commented on the future of the property market in Hong Kong: “For years we had Chinese growth going gangbusters and US rates going down. But transaction volumes have dried up quite significantly, so we are not really sure what the prices are. That looks like a tough fundamental outlook.”
An index from the Rating and Valuation Department released this month showed the commercial sector suffered in particular, with prices falling 5.7% in May compared with the same month last year.
The poor market outlook has also affected the private rented sector within Hong Kong, as rents at the top end of the market have fallen 6.4%, more than in any other city except Nairobi, according to Knight Frank.