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Real Estate Report – HK Property Market

April 30th, 2012 · No Comments

Prices and demand in Hong Kong’s real estate sector have peaked, specifically in the residential and office sub-sectors. Property analysts are anticipating demand and prices to fall steadily over the next months, thanks in part to the government’s residential price cooling measures.Nonetheless, the country is likely to stay as the world’s most expensive property market over the medium term.

A steady increase in the number of tourists flocking from mainland China have asisted  contribute to Hong Kong’s retail sub-sector seeing the most success during the H211. This is probably to continue at least over the short term, as the country is noted as one of the most dependable for retail products, giving high quality produce at low prices.

Industrial demand may undergo a temporary fall, as external trade has dropped due to the US and eurozone debt fears in those regions. However, logistics companies are more and more looking towards emerging markets for their property, and although we have not yet seen an increase in demand this may contradict  any forthcoming decline by reason of reduced exports.

Key Opportunities In The Real Estate Market:

– If the Hongkong property market is about to soften, it is probably that prices will dropped and the prime financial areas will become more inexpensive . – Investment activity in the Asia Pacific has  primarily picked up in the wake of the latest uncertainty in the US and eurozone. Being one of the  world’s top financial centres, Hong Kong will  benefit from international interest.

- Retail sales are likely to stay buoyant even if property prices do not decline due to the  continued influx of tourists from the mainland.

Key Risks To The Real Estate Market:

– Hong Kong’s commercial real estate sector has experienced a boom of late, but tenants are trying to tell in not so many words that they expect market rents to fall. Colliers foresees a decline of up to 10% in office rents during the year 2012.

- The anticipated  drop in property prices in Hong Kong does not essentially signify that increased affordability will follow. At this time of  global market uncertainty, Hong Kong is still likely to be one of the most expensive countries to purchase property, both residential and commercial.

- Sustained retail demand has made prices for retail developments to escalate, which may result in pricing some retailers out of the market altogether.

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