According to the latest report released by Knight Frank, the primary residential market was the most active among Hong Kong’s property sectors in October. Grade-A office sales remained sluggish and leasing market was stable. Further slowdown seen in the retail sales.
Residential
In October, the primary residential market was the most active among Hong Kong’s property sectors. A number of new residential projects launched offered attractive packages to lure buyers, which served to further quieten the second-hand market. Transaction volume in the secondary market dropped another 5.8% month on month to 2,653 in October, the second lowest level in 2013 so far.
Thomas Lam, Director and Head of Research & Consultancy, Greater China at Knight Frank, expects that the downward trend in home prices may become more apparent in 2014 if the government continues to implement its cooling measures.
Prime Office
Amid the implementation of cooling measures, Grade-A office sales remained sluggish, but the Grade-A office leasing market was stable. Grade-A office rents across all districts remained on a downward trend, with minor month-on-month falls of up to 2%.
With limited available office space and very low vacancy rates across all districts, Thomas expects Grade-A office rents to remain largely stable for the rest of the year. Office sales volume and prices will remain subdued.
Retail
In the retail sector, despite further slowing in sales growth, retailers were still expanding in major shopping districts, while shopping areas near the border continued to be supported by custom from same-day Mainland visitors. Looking forward, Thomas forecasts the growth of retail sales to slow further, weakening the bargaining power of landlords in prime retail areas, thus resulting in a more stable rental environment.