The property market is uncertain
Jones Lang LaSalle released the “Hong Kong Property Market Outlook 2020” forecast yesterday. Affected by uncertainties in the global and local economies, office prices, rents, and residential property prices and rents in Hong Kong will fall by 10% to 20% next year. Among them, the most gloomy luxury mansion market.
The chairman of Jones Lang LaSalle Hong Kong and head of capital markets, Zeng Huanping, said that the economic sentiment in the second half of the year and the unemployment rate rose to 3.1%, coupled with the first-hand vacancy tax will soon be introduced
Driven by the reduction of second-hand property prices, it is expected that the prices of small and medium-sized houses will fall by 10% to 15% next year, but the prices of luxury homes will fall even deeper and are expected to fall by 20%. It has been explained that in recent years, the purchasing power of luxury homes has come from the Mainland. However, the economy of the Mainland has also fallen, causing the luxury home market to have a “price without a market” or a “dry decline” situation. In addition, it was mentioned that because the future property prices will fall rapidly and deeply, which will affect the bidding attitude of developers bidding for land, it is believed that the official land purchase price will also fall back in the coming year.
Office retail prices are expected to fall by 20%
Affected by the Sino-US trade war and local political uncertainties, Grade A office buildings have also entered a downward cycle. Bao Yali, head of the commercial department of Jones Lang LaSalle, said that due to weakening demand from Chinese companies, rents for Central office buildings fell by 6.3% year-on-year in the second half of this year, the largest decline among commercial districts.
Bao predicts that leasing demand will remain weak next year, which will continue to increase the vacancy rate. Among the traditional core areas, Central, Wan Chai, Causeway Bay and Tsim Sha Tsui, the rents will fall the most, with about 15% to 20% expected. As for the retail market, Chen Yaofeng, senior director of the retail department of Jones Lang LaSalle, said that the global and local economy is still unstable, and the rental demand in the retail market will continue to be under pressure. Mall rents fell by 5%.