The home price hike in Hong Kong is unlikely to happen given the supply overhang, despite an anticipated resilient primary residential property market, says S&P.
The company said that home prices will be flat for 2025 and 2026, as supply and demand are not yet in equilibrium.
It added that developers will speed up moving inventory amid improved demand, driven by rising rents and the interest rate cut.
Primary residential sales transactions were expected to hit 20,000 for both this year and next, the highest level since 2019, S&P said.
However, it unveiled that completed but unsold units remained at a historically high 27,000 units in June, and that the government expects 20,098 units to be completed over 2026.
Moreover, the pace of hiking rent in the private leasing market would slow down in the future, as the government released additional plans to resolve the shortage of student housing, the firm noted.
Regarding commercial properties, S&P anticipates the rebound of leasing demand to slow, while rents will continue to go down to retain tenants.
Local retailers continue to struggle, having lost shoppers to cross-border consumption, the company said, adding that office demand remains weaker than pre-pandemic times.
HELEN ZHONG
