In Cushman & Wakefield’s Q2 2022 Hong Kong Residential Market Review and Outlook, they forecast stabilised housing prices in the city followed by a 48% increase in transactions for the quarter, facilitated by improved infrastructure connecting urban areas with the New Territories.
Leading global real estate services firm Cushman & Wakefield has released their Q2 2022 Hong Kong Residential Market Review and Outlook, tracking the impact and recovery from the city’s 5th wave of the Covid-19 pandemic. Housing prices have stabilised since April, as the city returns back to normal, transaction numbers expected to increase by 14,900 by the end of the quarter, 48% quarter-on-quarter, and 32% year-0n-year.
Improved infrastructure and the introduction of new Mass Transit Railway (MTR) lines connecting the New Territories (NT) and urban areas of Hong Kong are working to bridge the price gap between regions, which will in turn facilitate urban renewal. In the second half of the fiscal year, Hong Kong’s residential market is expected to be driven by new homes, and prices are forecast to rise no more than 3%.
Keith Chan, the Director, Head of Research, of Hong Kong at Cushman and Wakefield shared, “During the heights of the fifth pandemic wave, primary sales and projects were delayed due to restrictions. From March to April, primary transactions’ share of the overall market reached just 6-7%, but later rose to 24% in May, reflecting recovery in overall sentiment driven by the rebound of primary sales. It is estimated that circa 4,800 transactions will be recorded in June, contributing to circa 14,900 transactions in Q2, a sharp increase of 48% q-o-q, but still down 32% y-o-y.”
Overall residential prices, however, are still down by 2% as of April, but discounted unit sales are likely to slow, according to Cushman & Wakefield.
The newly added MTR East Rail Cross-Harbour Extension will further connect residents from all three of the city’s regions, enabling accessible travel and appreciating the value of residential real estates. The cross-bay link tunnel between Tseung Kwan O and Lam Tin is also expected to be open in the second half of the fiscal year, and will further extend the future Route 6 highway to East and West of Kowloon by 2026.
Chan added, “In the long run, the infrastructure improvements will benefit the local property market, but home buyers will inevitably face many challenges, such as rising interest rates driven by inflation, and the uncertain pace of economic recovery in the near-term. Nevertheless, after a relatively muted market for three consecutive quarters, end-users are expected to become more active, driven by buyers who are looking for their first homes or upgrading. Subsequently, it is expected that the transactions in 2H will be supported by strong primary sales, and will gradually extend to the secondary market.”