Developers will need to reconsider asking prices, especially as rising interest rates and cost-of-living increases squeeze buyers’ budgets and reduce demand, he added.

Since December 2021 the Bank of England (BOE) has raised interest rates 13 times, raising financing costs to 5 per cent from 0.1 per cent over the period. As consumer inflation in the UK remains well above a 2 per cent government target, another rate hike is in the offing in August, albeit at a more modest 25 basis points, analysts believe.

In May, the UK’s economy contracted by 0.1 per cent, which was a shallower decline than expected but by no means good news.

The policy tightening appears to have dampened demand for homes, based on BoE’s data. Approved monthly mortgage applications ranged between 39,650 and 51,490 this year through May, significantly lower than in the pre-pandemic year of 2019, when approved applications consistently topped 62,000 per month.

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Meanwhile, overall UK home prices slipped 2.3 per cent in May from a September peak to £286,000 (US$370,000), according to the latest official data.

The latest average price in Canary Wharf is down 4 per cent compared with the previous 12-month period and 3 per cent lower than in 2020 when it peaked at £583,114, according to data from Rightmove.

“There will be opportunities for savvy investors to pick up bulk purchases on some of these new developments as developers may struggle to sell off their projects,” Monaghan said. “We are currently acting on behalf of an investor in Hong Kong who is looking to diversify his portfolio and wants to purchase a block of apartments [in Canary Wharf], taking advantage of current discounts.”

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“You’ll find that Canary Wharf is more than a financial district now, and it’s attracting quite a lot of residents,” said Chris Hoong, FEC’s managing director. “More and more residential projects are being built in the area, and more amenities are being located there. It’s not a place where you turn up just to go to work in a bank.”

FEC’s Aspen project launched sales in 2020 and is “nearly sold out”, Hoong said. With flats ranging from studios up to three-bedroom units, prices start at £554,000, according to Knight Frank’s website.

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“Offices are suffering for a number of reasons as many people have decided to work from home,” he said. “So while the financial companies are downsizing, you’re attracting new industries. For example, a lot of people don’t know that there is actually a very vibrant biotech community. It’s a transition that we are seeing at the moment.”

Meanwhile, Cheung Kei group, a private mainland developer controlled by Shenzhen-based tycoon Chen Hongtian, also owns two properties in Canary Wharf that were undergoing restructuring, according to a company statement in May. The Post has contacted Cheung Kei for a comment.

Many agents remain positive about Canary Wharf’s prospects.

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“Canary Wharf gets criticised as ‘Singapore on the Thames’, but plenty of people love both Singapore and Canary Wharf,” said Kashif Ansari, Juwai IQI co-founder and group CEO. “The neighbourhood is modern, clean, and tranquil on the weekends. It is safe and convenient and has excellent connections to the city.”

Train ridership, he said, also suggests that the area is becoming a residential and recreation destination, potentially lifting its property potential.

“Transport for London says the number of weekend and evening visitors to the Wharf rose 50 per cent between 2019 and 2022,” Ansari said. “Total tube and train station usage figures show that more people travel to Canary Wharf daily than before the pandemic.”

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HSBC’s exit is only likely to impact office property in the area, which amounts to about 1.5 million square metres of space, analysts said.

“Without doubt the news is a blow to Canary Wharf, but it’s worth remembering three-quarters of the estate is offices and nearly a fifth is shops and restaurants,” said Chris Dietz, president of global operations at Leading Real Estate Companies of the World. “Canary Wharf is also building some new residential developments, comprising 3,900 homes.”

With 3,500 current residents, plus the new Elizabeth Line, which has a Canary Wharf station and runs between Essex and Heathrow Airport, the absence of HSBC is unlikely to put off residential investors, Dietz said.

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“Separately, Canary Wharf is fast becoming a life-science hub as it’s home to several leading healthcare and life sciences-focused companies and 40,000 sq ft of wet lab space that has just opened,” said James Bearryman, head of East London projects, CBRE residential team.

The district has also secured the government’s nod for the construction of a 750,000 sq ft science laboratory unit, the largest in Europe catering to small biotech firms.

Finally, for those looking for affordable housing options in London, Canary Wharf presents “value for money”, with “core volume of sales in the area around the £400,000 to £750,000 mark, making it a financially attractive place to buy with great transport links and amenities,” said Warren McCann, sales director for Chestertons’ Canary Wharf branch.