Hong Kong property market is moving to a full recovery, with home prices expected to rise by 10 percent this year, said Jeff Yau, Hong Kong property analyst of group research at DBS Hong Kong.
Yau mentioned that continued demand from both mainland and local buyers and a decrease in future housing supply, will likely drive prices even higher next year. He added that current price levels remain 15 to 20 percent below the 2021 peak, and the property market is expected to continue its upward trend until it surpasses previous high.
Besides, he noted that developers priced new projects lower than the second-hand market to reduce inventory last year. However, developers have now cancelled these discounts, and with second-hand market property prices already up 10 percent, units purchased last year may have already seen a 10 to 20 percent increase in value, which is a significant opportunity to profit within one year.
The office market recovery remains uneven, with Central leads on strong leasing demand from the financial sector and active capital markets, while Kowloon East and Island East continue to face pressure from high vacancy.
Regarding the retail segment, despite tensions in the Middle East and stock market volatility, Hong Kong's retail sales have remained resilient, with overall retail sales rose 12 percent in the first quarter of this year, said Percy Leung, DBS Hong Kong's senior research analyst.
Leung added that in the past two quarters, retail sales had recovered to around 83 to 84 percent of pre-COVID level. Considering factors such as the recovery in local consumption and the appreciation of yuan, she said Hong Kong's retail sales will increase by 5 percent this year, and retail rents may rebound by 3 percent.
