How the Hong Kong property market is bouncing back in 2024 – especially the luxury sector
- Investors remain cautious, but government incentives have helped, high-value properties are continuing to find buyers, and the rental market is stable
Hong Kong’s property market, hit by years of high interest rates and weak demand, may be showing some signs of recovery, thanks to government measures like abolishing stamp duties and easing mortgage restrictions.
While headwinds are likely to remain for some time, property analysts suggest that the likelihood of interest rates beginning to drop over the next few months could give the sector further support.
“With the US expected to lower interest rates more actively next year, we are more likely to see a better sentiment in the residential market in 2025 for all buyers, sellers and investors,” said Martin Wong, senior director and head of research and consultancy at Knight Frank Greater China.
Slow recovery
In April, the government eliminated some measures that had been in place for years and were originally intended to cool demand in the city’s already expensive real estate markets – most notably extra stamp duties. The Hong Kong Monetary Authority (HKMA) also took steps to make mortgages more accessible, including boosting loan-to-value ratios to 70 per cent for residential properties worth up to HK$30 million and 60 per cent for more valuable properties, and from 60 per cent to 70 per cent for non-residential properties.
After the abolition of stamp duty, residential home sales jumped 114 per cent in April to 8,970 units from 4,186 in March, according to data from Knight Frank Greater China. The total for April was “the highest single-month transaction number in the past decade”, said Lucia Leung, director of research and consultancy at Knight Frank.
At the time, the measures also boosted demand and reduced the financial burden for non-local buyers.
However, the recovery is not likely to be fast, given persistent high interest rates and weak economic performance. According to Wong, the available stock may need to fall by 8,000 to 10,000 units before developers can start raising prices. That could take six to nine months.
Another challenge is that the recovery is likely to be uneven. Data from property consultancy firm Jones Lang LaSalle (JLL), for instance, showed that residential property transaction volume fell in May to 1,934 units in the primary market and 3,612 units in the secondary market.
