Hong Kong property purchases soar to two-year high of $2.2B
The overall volume of property transactions is expected to surpass HKD628.4 billion in the first eight months
As reported in South China Morning Post, Hong Kong saw a surge in non-residential real estate investments this year, as mainland Chinese and foreign investors snatched serviced apartments, shops, industrial buildings, and car parking bays in the city.
Based on data by Midland IC&I, property deals by foreign and Chinese investors reached a two-year high of HKD17.3 billion (USD2.2 billion) in the eight months through mid-August.
Up to HKD8.53 billion, or 49 percent of the deals, were made up by investors that reside in mainland China, the highest figure since the city’s anti-government protests in 2019.
Tony Lo Chin-ho, chief executive of Midland’s ICI Property unit, said, “The overall investment market has gradually recovered in Hong Kong, with the pandemic under control. The number of big-ticket transactions is showing an upward trend.”
Midland’s data revealed that the investment boom was the main underlying factor in Hong Kong’s economic recovery, which expanded by 7.5 percent in Q2.
Moreover, total non-residential real estate deals, including local transactions by Hongkongers, increased to HKD49.1 billion as of mid-August, more than the 12-month total for 2020.
Transactions may drop in H2 2021, as some foreign investors delay their expansion plans in the city due to concerns about business operations under a proposed anti-sanctions law for Hong Kong.
“Although the anti-sanctions law was postponed in Hong Kong, it still caused worries [among] foreign investors,” said Lo. “Most foreign funds entered the market in the first half of the year.”
Nevertheless, Hong Kong’s real estate market is red-hot, as investments flooded into residential property, offices, retail shops, and even parking spaces, to take advantage of easy financing and record low-interest rates.
More: Strong demand and low interest rates cause Hong Kong home prices to surge
The overall volume of property transactions, counting residential and commercial real estate, is expected to top HKD628.4 billion in the first eight months, surpassing last year’s 12-month total, according to Centaline.
Alvan Chan, director of Midland Industrial, a department of Midland ICI&I, said, “As foreign capital has already entered the market in the first half, and the number of suitable listings has decreased, the proportion of foreign capital’s investment will gradually decline in the second half.”
The Property Report editors wrote this article. For more information, email: [email protected].
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