Hong Kong property

Hong Kong property market price slump is anticipated to worsen in 2023

According to Natixis SA, the combination of rising borrowing costs, a recession, and a resident evacuation will cause the decline in Hong Kong property values to worsen next year.

The residential prices are predicted to drop by 12 percent in 2023, followed by 2 percent the next year, declining from the peak in late 2021 to 25 percent (Nov 30).

The city’s residential real estate industry, among the largest sponsors of the low worldwide interest rates, is facing an unwelcoming future.

According to research published this month, Goldman Sachs Group Inc. forecasts a 30% decline in housing prices from last year’s levels.

Due to Hong Kong’s currency peg with the US dollar and the city’s converging economy, borrowing costs have risen to the peak level since 2008.

By the end of this year, the GDP will be 3% lower than before COVID-19, as opposed to the rest of Asia’s average growth rate of 6%.

How will the Hong Kong property slump affect investors?

The decline in Hong Kong’s property potential purchasers and Hong Kong’s declining appeal as a financial centre increase the pressure on sellers. In the same year, the city’s population fell at its fastest rate in at least 60 years as residents fled the increasing control of Beijing and the COVID limits.

It is claimed that the hot emigration surge and the fall of immigration have poured gasoline on the flames. The investors’ desire for expansion to soothe the US-China tensions and the city’s weakened competitiveness due to the lost years during COVID further damaged Hong Kong’s appeal.

In this regard, the government may reduce stamp duty because of the decline in real estate prices to encourage investors.

I am Tyson Yuk, the founder of the blog Commercial Realty Singapore. With over 15 years of experience, my forte is in the commercial and luxury property line. With my blog, I aim to educate, advise and share tips and tricks with potential property buyers and investors to help them make successful property ventures.

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