Hong Kong offers a variety of housing options, from claustrophobic quarters to upscale residences with first-class facilities and door staff. Although there are many various housing options, most people live in one of several flat buildings instead of real homes. If you want to buy or rent a home here, you must first familiarize yourself with local real estate costs. Everything you need to know about Hong Kong housing rates, recent shifts, and projected rates is covered in the section that follows.
Real estate rates
The real estate market has had phenomenal expansion in the last 13 years, with values increasing by 275%, based on research by Universal Property Directory dated April 2022.
As per the research, significant increases in values in the mortgage market occurred in 2009 (28.5%), 2010 (21%), 2012 (25.7%), 2014 (13.6%), and 2017 (14.7%), which may be signs of a property boom in the region.
Based on the 2022 Data compiled by the Global Home study, Hong Kong continues to be the most unaffordable housing market, with typical prices standing at 23.2 times the yearly income.
By December 2021, domestic home prices had increased 3.6% year over year. The main and secondary property market in Hong Kong saw up to 74,297 sales, which is a 24% rise from 2020. However, since the middle of 2021, housing prices have been on the decline which is further discussed below.
Property rates dropping
Higher interest rates and a massive outflow of expatriate labor caused costs in one of the most affluent capitals on the planet to drop. Furthermore, experts in the field warn that the worst is yet to come.
The housing price ranking dropped 2.4% to 352.4 in October. The city’s prices could decline 25% from their last high in late 2021 before they begin to rebound, according to a Natixis analysis.
According to researchers, the recession is predicted to worsen by 12% in 2023 and then by just 2% in 2024. Some of Hong Kong’s greatest private housing estates experienced declines. A 393-square-foot flat in YOHO town is presently advertised for 5.98 million Hong Kong dollars, which works out to around HK$15,216 per square foot and represents a 20% price reduction from the previous month.
The bleak picture is influenced by several reasons, including poorer growth estimates, while immigration dilemmas and skyrocketing interest rates continue to be major roadblocks.
Factors influencing real estate prices
Let’s look at the variables that have influenced residential housing rates over the last few years.
increased interest rates
To stop the Hong Kong Dollar from moving away from the US dollar, the HKMA increased its standard rate from 0.75% in March to 4.25% in November. Money movements could cause the currency’s tie to the US dollar to deteriorate. People have refrained from taking out any housing loans as a result of the interest rate increases, which has had an impact on the market.
COVID-19 limitations
On September 26, Hong Kong lifted its Covid-19 limitations on incoming visitors. It is now permissible for visitors to Hong Kong to self-monitor their well-being for 3 days at their homes or resorts.
But before that, visitors were obliged to have to self-quarantine for 3 weeks at specific hotels. Then it was changed to one week, the first three days spent in hotels that were approved before the last four days were spent at home. For investors from mainland China or other countries, the limitations made it difficult for them to go to Hong Kong.
Sluggish growth of the economy
As per official figures as of 11 November, the country’s GDP declined by 4.5% in Q3 2022, widening from -1.3% in Q2 and recording 2 sequential quarters of declining performance. This slow growth in the economy also affects the property rates in the country.
