Hong Kong Property Market Q4 2024: Buyer's Market & Leasing Opportunities

Sales: Favorable Conditions for Buyers

The Hong Kong property market firmly remains a buyer's market in Q4 2024. Despite recent rate cuts and China's increased economic stimulus, which have positively influenced buyer sentiment and driven a notable increase in inquiries, buyers hold the advantage. Those seeking properties for personal use are re-entering the market while prices remain accessible and inventory is available.

Impact of Rate Cuts and Economic Stimulus

The removal of property curbs in late February led to a brief rebound. However, the abundance of unsold inventory and a weaker-than-expected Chinese economic recovery have prolonged the market's return to full strength. We observe continued price softening in areas with ample supply, such as Pok Fu Lam and Western Mid-Levels. This has affected market transactions, keeping volumes low, although we anticipate an increase as interest rates continue their downward trend towards year-end.

Challenges in Financing and Market Transactions

Financing remains a challenge, with low bank valuations impacting buyers' ability to upgrade to larger properties. Many potential sellers struggle to secure financing for their next purchase after selling their current property. While falling interest rates are a positive sign, their short-term impact on pricing will likely be limited. However, we do expect transaction volumes to rise. Inquiries for sales have increased by 30% in the past two weeks, as buyers seek to capitalize on reduced prices and more realistic vendor expectations. In prime Southside districts, we anticipate signs of recovery in early 2025 as distressed stock clears and further rate cuts take effect.

Investment Opportunities in a Softening Market

Savvy investors can find strategic opportunities to acquire properties that rarely come to market or purchase properties at significant discounts compared to previous years. Many buyers are beginning to view Hong Kong as an attractive investment proposition again at these discounted values, anticipating capital gains over a 3-5 year period. Hong Kong's absence of a capital gains tax adds to its appeal as an investment destination.

Leasing: Robust Demand and Emerging Trends

The leasing market remains robust, fueled by strong arrivals through overseas talent schemes, particularly from Mainland China, and the continued return of residents from Singapore, the UK, and the US. Mid-Levels Central and Repulse Bay are exhibiting the strongest performance.

Prime Locations and Lifestyle Preferences

While some segments of the rental market are softening, demand for well-located, renovated homes near schools, hiking trails, beaches, and other lifestyle amenities remains strong among new arrivals to Hong Kong. This sustained demand keeps inventory tight in these desirable areas.

Don't hesitate to get in touch with Victoria Allan or your Habitat consultant to discuss the evolving market dynamics and how we can collaborate to achieve your property plans and goals.