Hong Kong’s worst recession on record points to bleak outlook in 2021 for residential property and commercial real estate prices
- Mass market and luxury home prices are expected to drop between 5 and 10 per cent in 2021 on lower transaction volumes, say analysts
- The pandemic will affect the uptake of grade A offices, with Cushman & Wakefield predicting rents to fall between 11 and 16 per cent this year
The coronavirus pandemic will continue to weigh on all segments of Hong Kong’s property market this year. From mass housing to luxury residences, from offices to shops, no major segment will be spared from the recession and rising unemployment, analysts say.
A straw poll of 20 analysts, agencies and developers by the South China Morning Post on housing prices in 2021 showed six expect them to drop, seven were unsure. Only seven predicted outright gains.
“The uncertain economic and business outlook and weakness in labour market conditions are likely to impact mass residential severely despite very supportive borrowing costs and fundamental demand-supply imbalance,” said Harry Tan, head of research for real estate in Asia-Pacific at Nuveen. The firm is among the most pessimistic in the poll by calling a 5 to 10 per cent drop in mass residential prices in 2021.
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