Colliers look down on small and medium-sized houses
The property market has weakened significantly since the second half of 2018. Colliers International expects that the decline in small and medium-sized residential property prices will continue in the first half of this year. Developers will even sell at a low market price of 15%. However, the atmosphere in the second half of the year is expected to recover and rebound. The annual property price only fell by 3.8%.
Shi Feng, senior director of Colliers International Research Department, pointed out that the real estate market has turned negative in the second half of 2018. The residential market atmosphere has continued to weaken. However, there is a gap between the price of new buildings and the price of land absorbed by developers in the early years. There is a certain degree of profit, so there is room for downward adjustment of the offer price. It is estimated that the developer will open at a low market price of 15% in the first half of the year to attract buyers to the market. The second-hand market will also follow the decline, but the decline will be milder, about 10%.
As market demand continues, it is expected that after the price cut, buyers will be attracted to the market. In the second half of the year, the housing market will recover and the property prices will stabilize or even rebound slightly by 6% to 7%. He expects small and medium-sized residential property prices to fall by 3.8% and rents to fall by 2% this year; luxury home prices and rents fell by 2% and 0.9% respectively. As land supply fails to meet the standards in the next four to five years, the government is expected to relax the mortgage market and increase the liquidity of the second-hand market.
In terms of office buildings, Yan Huiping, general manager of Colliers International Commercial Property Services, believes that Chinese companies will slow down the pace of expansion in 2019, and some will even make room for them. The rent growth of Grade A office buildings in Central and Admiralty will ease. Rents in Central and Admiralty office buildings fell 3.8% this year, slightly higher than the overall decline of 1.5% on Hong Kong Island. Kowloon East benefited from the pre-leasing situation. This year’s rents are expected to rise by more than 2%.