Hong Kong property prices are expected to fall 3.8% next year

Hong Kong property prices are expected to fall 3.8% next year. High strength is expected to rebound in the second half of the year.

The property market turned worse, Colliers International released the latest “Hong Kong property market callback strategy recommendations" report pointed out that property prices in the second half of next year may be adjusted and rebounded, the annual decline is only about 3.8%, but the decline in property prices may not affect the rent.

The report believes that Hong Kong’s residential property prices have entered a turning point due to uncertainties such as stock market declines, interest rate hikes and Sino-US trade wars. Shi Feng, director of Colliers International (Hong Kong) Research and Consulting Department, said that under the most optimistic circumstances, property prices are expected to pick up slowly in the second half of 2019, which is expected to fall only 3.8%. He said that changes in property prices do not necessarily affect rents, as the residential leasing market is dominated by users and the rental trend is relatively stable.

Tenant renewed bargaining power

As can be seen from the past figures, residential rents have always been less affected by stock market volatility, and rental market demand generally increases as property prices become unaffordable. Collier believes that this shows that more and more people tend to rent rather than buy units.

In addition, as many companies originally located on Hong Kong Island have chosen to relocate their office buildings to Kowloon, Colliers recommends that foreigners living in Hong Kong consider moving to neighboring companies in Kowloon or the New Territories. Due to the sufficient supply of rent-discharging units and the easing of market sentiment, tenants who are expected to renew their contracts have stronger bargaining power.