Hong Kong: General market overview

Hong Kong is one of the most densely populated regions in the world. As a thriving financial centre in Asia, Hong Kong has consistently emerged as one of the world’s most attractive real estate markets to invest in, especially given its limited land supply. We expect investors’ attraction to the Hong Kong real estate market to continue, supported by the following observations:

The commercial/ retail market transaction levels remain strong and the rental rates are picking up steadily. The opening of the High Speed Rail and the Hong Kong-Zhuhai-Macau Bridge have stimulated traffic, trade and business activities in the Greater Bay Area, supporting the high rental rates for peripheral districts.

For the office leasing market, in an attempt to cut rental cost, many offices and commercial establishments are moving out from the central business district to emerging commercial districts, such as Quarry Bay and Kowloon East. Some companies have also started renting co-working spaces as an alternative to traditional offices.

For the industrial market, there is continued growth due to the sustained demand. The Hong Kong government is working to increase land supply by diversifying industrial land use and reducing ownership threshold for compulsory sale for redevelopment.

The residential property market in Hong Kong has shown signs of cooling down. While there are public calls to relax the stringent stamp duty requirements which were put in place to cool the market, the Hong Kong government appears to have no plans to respond to such calls.

The overall atmosphere in Hong Kong property markets in 2019 may still be affected by the US-China trade war, the impact of Brexit and the potential increase in interest rate.

Updated on 1 February 2019.

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