Key Contacts

    • Chief Marketing Officer, Greater China T: +852 2846 7460 EAA Lic No E-426684
    • Senior Director, Public Relations T: +852 2846 7175

 

Visiting Us

Hong Kong SAR

​4/F Shui On Centre
6-8 Harbour Road​
Wanchai
Hong Kong​
Hong Kong
T: +852 2840 1177
F: + 852 2840 0600
info@hk.knightfrank.com

News from Knight Frank Hong Kong

Hong Kong home prices to gain 10-13% over 2017 despite recent slower growth

18 September 2017

 Knight Frank launches the latest Hong Kong Monthly Report. Central continued to outperform the other business districts with increased requirements from international financial firms and sustained demand from Mainland companies.  Home sales rebounded in August, with more primary units launched. Home price growth continued to slow down, but we still expect prices to increase 10-13% this year. The retail market recovered further but faces a number of risks. Shop leasing slowed down, with some landlords becoming firm on rental rates and potential tenants remaining cautious.

 
Grade-A Office
 
Hong Kong Island
 
The low vacancy rate and sustained demand continued to support Central Grade-A office rentals. Office demand from traditional financial institutions saw improvement in the past few months, with expansion requirements from major foreign firms. Mainland firms, meanwhile, became a less dominant force than in previous years, although they remained a key demand driver for Central office space. We expect Central rents to increase 5-7% for the whole year.
 
Kowloon
 
David Ji, Director and Head of Research & Consultancy, Greater China says Kowloon’s office leasing transaction numbers in August shrank 20% month on month, as market momentum softened during the summer. Most transactions were recorded in Kowloon East and involved mainly IT and sourcing companies. Kowloon East Grade-A offices remained competitive with their high quality-price ratio. 
Residential
 
Residential sales rebounded 14.2% month on month to 4,014 in August 2017, with more primary units launched. Home prices continued to trend upwards, but growth in July slowed to a mere 0.1% compared with June, according to official data. On the leasing front, the peak season for the market passed along with the start of the new school year. 
 
Another interest-rate hike is generally not expected during the remainder of the year. Hong Kong’s housing supply is expected to increase, but not in the short term. Given sustained demand, we expect prices to grow 5-10% for luxury homes and 10-13% for mass residential units over 2017.

Retail
 
Visitor arrivals grew another 2.4% year on year in July, led by a 3.7% growth in visitors from the Chinese Mainland. With the improved tourism industry, retail sales value gained a notable 4.0% year on year in July, the fifth consecutive month of growth.
 
In view of the encouraging visitor arrival and retail sales figures, some retail property landlords became firmer on rental rates, which slowed leasing activity, with potential tenants remaining cautious.
 
We remain cautiously optimistic and expect the market to bottom out in the second half of 2017.