Cuddly & Leung: Property prices in Hong Kong are expected to increase by around 7% throughout the year, and residential rents are expected to rise 5% to 7%

According to the Zhitong Finance App, Tang Suk-yin, Deputy Managing Director of Dai Deliang and head of the Hong Kong Research Department, said that considering the slowdown in transactions in the third quarter, the forecast for residential transactions for the full year of this year will be adjusted to about 67,000 to 68,000 units. On the price side, if interest rates rise again in the fourth quarter, the property market is expected to be mainly adjusted in the short term. Residential property prices will rise and fall in a narrow range of about 7% (increase) throughout the year, which is similar to the increase in the first eight months of this year. As for the leasing market, residential rents are expected to increase by 5% to 7% throughout the year, supported by rental demand from professionals, students and new arrivals.

Although the current forecast for property prices is lower than the previous forecast of a 10% increase, Tang Suk-yin pointed out that since the market is still supported by rising rents, the forecast figures will not be lowered excessively. It is expected that property prices will rise and fall between plus or minus 1% to 2% in the fourth quarter.

Lai Kin-ming, senior director of the Hong Kong Valuation and Advisory Services Department at Cushman & Wakefield, said that with the release of market purchasing power over the past year and US interest rate hikes, etc., the bank's inquiry volume in September fell 35% compared to the high level in May. On the other hand, he expects that if the US raises interest rates again, the Bank of Hong Kong is more likely to follow suit this time in response to higher interest rates and financial pressure. However, Lai Kin-ming also pointed out that in anticipation of a calmer property market from the fourth quarter to the beginning of next year, it will help save purchases. Once interest rates are not raised next year, “Xiaoyangchun” is expected to occur in the first half of next year.

In terms of office buildings, Siu Leung Fai, managing director of Hong Kong, is expected to increase rents by 12% to 14% in the Central District this year, and is expected to drive rents for Hong Kong's Grade A office buildings to rise by about 5% to 7% throughout the year. However, rents in Tower A in East Kowloon are expected to drop by 3% to 5%. Although the overall occupancy rate may have been high last year, non-core areas still need a long time to absorb existing vacant floors. As for the end of the year, the overall occupancy rate is expected to remain stable at around 19% to 20%.

On the retail side, Siu Leung-hui expects that continued improvement in various economic indicators in the coming months will help drive Hong Kong's local consumption to remain resilient, and tourist consumption is expected to recover further. He believes that local and overseas brands in Hong Kong will remain cautious in expanding and deploying and will focus on core retail areas. Therefore, he predicts that first-tier street rents in the core area will continue to recover moderately. Among them, Causeway Bay and Central may record a slight increase of 2% to 3% throughout the year; Tsim Sha Tsui and Mongkok are expected to record slight increases of 1% to 2%.