Key Contacts

    • Director, Head of Marketing & Communications, Greater China T: +852 2846 7460
    • Associate Director, Public Relations T: +852 2846 7175

 

Visiting Us

Hong Kong

Knight Frank
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

Slower growth in Mainland housing market amid cooling measures

24 February 2017

Knight Frank today releases the fourth quarter (Q4) 2016 Greater China Property Market Report which looks at the Grade-A office, luxury residential and prime retail property markets in Beijing, Shanghai, Guangzhou, Hong Kong and Taipei. During Q4 of 2016, residential markets in major Mainland cities slowed down amid further market cooling policies. The office and retail markets faced various challenges in Q4, including a flood of new supply.


Grade-A Office
 
In Q4 2016, three new Grade-A office buildings in Beijing resulted in a higher vacancy rate and lower rentals. Shanghai also saw a huge amount of new office space come onto the market. In Hong Kong, the leasing market remained lukewarm on Hong Kong Island, limited by the lack of available space. The Kowloon market, in contrast, remained active, driven by strong relocation demand from tenants on Hong Kong Island. Looking ahead, abundant upcoming Grade-A office supply on the Mainland is expected to suppress rental growth and push up vacancy rates in major cities.
 
Luxury Residential
 
The Beijing municipal government released the latest market cooling policies at the end of September. New-home transaction volume fell and the growth in prices slowed. In November, the Shanghai Housing Construction Committee announced new cooling measures, resulting in a drop in luxury residential transaction volume. In early November, the Hong Kong government lifted the Double Stamp Duty rate for residential properties to a standardised 15%, leading to a significant reduction in residential sales in the following month. This policy is expected to have a greater impact on mass secondary sales than on super-luxury and primary sales. Looking ahead, residential sales on the Mainland are likely to decline, while growth in home prices in first and second-tier cities will slow down this year.
 
Retail
 
In Q4 2016, five shopping malls opened in Beijing, all located in decentralised or suburban areas. Shanghai also experienced a high rate of mall openings, with nine retail malls opening either officially or through soft launch. Two prime shopping centres opened in Guangzhou, Hong Kong’s retail sales value and visitor arrival figures improved towards the end of 2016. The market is expected to bottom in the first half of 2017 and remain steady for a period of 9-12 months. With fewer Mainland visitors and booming e-commerce, Taipei’s traditional retail industry did not record significant growth in the traditional peak season.