Hong Kong’s commercial property market cooling rapidly as it feels impact of trade war
- Hong Kong was Asia’s top ranked market for commercial deals in the first three quarters of this year
- Transaction volumes in Hong Kong however fell 25 per cent from July to September
Hong Kong topped the list for commercial property transactions in Asia in the first nine months of this year, but deals started to slow down in the third quarter as investors weighed the impact of the US-China trade war, rising interest rates and lower yields, according to a report from data provider Real Capital Analytics.
Transaction volume in the third quarter stood at US$3.1 billion in Hong Kong, nearly 25 per cent lower than the US$4.1 billion in the same period last year.
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Overall commercial deals in the city jumped 65 per cent to US$22.99 billion in the first nine months of this year from US$13.95 billion a year earlier, according to the report.
Office property transactions in particular surged 169 per cent to US$13.59 billion in the first nine months.
“For the past decade the Asia-Pacific real estate investment market has been characterised by rising prices enabling capital gains for most players,” said Petra Blazkova, senior director for Asia-Pacific at Real Capital Analytics. “[But] Hong Kong’s mega deals of the past appear to be giving way to a plateauing market. This is not surprising after an astonishingly strong run.”
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The report also noted a weaker pipeline of transactions, with only US$6.8 billion of transactions pending in the final three months of the year in Hong Kong.
