Hong Kong’s moribund luxury property market unlikely to be resuscitated by chief executive’s policy speech
- Hong Kong Chief Executive John Lee Ka-chiu’s policy speech is expected to unveil some rollback of the property cooling measures announced earlier
- The transaction volume for residential properties valued at or above HK$20 million (US$2.56 million) has plummeted by 52 per cent in the third quarter
Hong Kong’s luxury home market, which has been dealt a triple whammy of lower economic activity in mainland China, elevated global interest rates and higher mortgage costs, is poised for disappointment at this week’s policy speech by the city’s chief executive.
“The government is expected to relax the cooling measures in the short term,” said Norry Lee, senior director of projects strategy and consultancy department at JLL Hong Kong. “However a partial or even full reduction in stamp duties is unlikely to bolster the luxury prices, but it will cushion the price fall and promote market activities.”
Despite sellers reducing their asking prices, the luxury housing market has yet to witness an influx of buyers. The transaction volume for residential properties valued at or above HK$20 million (US$2.56 million) has plummeted by 52 per cent in the third quarter. In the first nine months of 2023, the capital value of luxury properties fell by 0.3 per cent year-to-date, which erased all the gains made in the first half of 2023.
The difficult global economic environment and a discouraging outlook are set to pressure luxury home prices further, regardless of whether cooling measures are reversed at the upcoming policy address, said Cathie Chung, senior director of research at JLL Hong Kong.
She said the weakening mainland’s economy, an interest rate hiking cycle that may be extended and higher mortgage rates will continue to exacerbate the luxury market.
