Menu

Coronavirus is wreaking havoc. Hong Kong condo sales are on the rise.

In 2020, new condo project prices are expected to fall significantly.

Just 40 apartment flats from two new mass residential projects were launched in the primary market one month after the Chinese New Year (January 25, 2020), according to JLL's latest Hong Kong Residential Market Monitor Report, compared to an average of about 530 flats in the previous three years. According to the survey, after developers postponed project launches, new project prices would face downward pressure due to increased competition. buy and sell qatar

Developers have a habit of launching projects shortly after the Chinese New Year, addressing demand that has been building since the Christmas and New Year holidays. As a result, post-Chinese New Year consumer sentiment and sales velocity are generally strong.

In Hong Kong, however, Henry Mok, Senior Director of Capital Markets at JLL, said, "Because developers have chosen to avoid launching new projects due to Coronavirus concerns, the traditional seasonal sales recovery following CNY will most likely be pushed back this year. In light of the outbreak in the area, potential buyers have also taken a wait-and-see approach. As a result, home sales are likely to remain sluggish until the threat of contagion has passed."

During the 2003 SARS outbreak, JLL's mass residential capital values index fell by 12% from March to June, owing to the highly dampened sentiment caused by uncertainty. The current coronavirus outbreak, like SARS, may have a large impact but will be short-lived, according to the study. Meanwhile, the market's longer-term prospects are still dependent on domestic residential demand and supply dynamics, as well as broader economic conditions.

Nelson Wong, JLL's Head of Research in Greater China and Hong Kong, said, "In 2020, we expect mass residential prices to decline by 10% to 15%, according to our forecast. The contracting market is now under even more pressure as a result of the outbreak's additional downside risk. As a result, depending on the length and magnitude of the novel Coronavirus outbreak, a deeper cut in home prices could be likely. Given the bleak business outlook and plentiful supply, developers may be forced to lower listed prices when the majority of stock is available for purchase in the second half of this year."

The vacancy rate in Hong Kong's office market has reached a 12-year high.
The property markets in Hong Kong are still being impacted by political instability and the Coronavirus outbreak.
According to the latest Property Market Monitor from international property consultancy JLL, Grade A office rents in Hong Kong's Central dropped 2.7 percent to HKD 102.4 per sq. ft in May 2020, as the vacancy rate crossed 5% for the first time since the Global Financial Crisis in 2008.

In May 2020, overall office rents fell by 2.2 percent month over month. Tsim Sha Tsui and Kowloon East, where vacancies were at their peak among the major office submarkets, saw the steepest drop. According to JLL data, vacancy rates in Tsim Sha Tsui and Kowloon East increased to 6.5 percent and 13.7 percent, respectively, last month.

According to Alex Barnes, Head of Markets at JLL Hong Kong, "Rents continued to be pressured by the vacancy, but the decline was less severe than in previous months. Central's Grade A office rents fell 2.7 percent month over month in May, following a 4.5 percent decline in April "m-o-m in April," says m-o-m.

"As uncertainty persisted and landlords were more likely to lower their rental expectations," he continued, "tenants opted to extend their leases to save on capital expenditure."

Nelson Wong, JLL's Head of Research in Greater China, said, "Because of the slowing leasing demand, the overall Grade A office market saw a negative net take-up of 196,500 sq. ft in May. In Central, the sector saw a net withdrawal of 115,600 square feet, the largest monthly net withdrawal in over a year."

The majority of new lettings were in locations outside of Central. Two finance companies have rented a total of 18,900 square feet at Lee Garden Three in Causeway Bay, looking for more cost-effective alternatives outside of typical business districts.

Go Back

Comment

Blog Search

Comments

There are currently no blog comments.