Concrete Analysis | Year of the Ox: Hong Kong’s property market to throw up opportunities as city emerges from two-year recession
- Hong Kong’s close link with China will be a major factor in propelling the city’s economy, which is forecast to grow 4.4 per cent this year, according to Oxford Economics
- Colliers expects stronger investment appetite from mainland players and private equity funds for Hong Kong property
The Year of the Ox, a hardworking and methodical animal, has the makings of being a positive and productive period in Hong Kong. Like this zodiacal projection, we anticipate that the city’s hard-working population will be rewarded as it emerges from a near two-year recession, with firm growth as mainland China starts to kick on, recommencing positive economic momentum.
Hong Kong is fortunate to have its economy joined at the hip to mainland China’s as it is the first major global economy to have entered the post-Covid period, having registered year-on-year gross domestic product growth of 4.9 per cent in the third quarter of 2020, giving it the distinction of ranking as the best-performing economy in the world.
And while Hong Kong’s real GDP growth for 2020 is forecast to be minus 6.1 per cent, because of weak domestic and external demand, it is now clear that its close link with China will be a major factor in propelling it into the post-pandemic period. Oxford Economics is forecasting 2021 to be a year of further stabilisation and recovery for Greater China – with China and Hong Kong’s GDP predicted to grow by 7.8 per cent and 4.4 per cent year on year, respectively.
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However, the return of mainland Chinese visitors, who accounted for 80 per cent of all tourists in 2018, is an even more critical factor with respect to returning to the former economic “normal”. While discussions with Guangdong province about inbound visitors have recently been more positive, exact timing remains uncertain.