Hong Kong home sales sink to 33-year low in 2023
Property transactions in Hong Kong descended to the lowest level in 33 years in 2023 as sentiment among potential home buyers was submerged under a deluge of poor economic news and high interest rates, although December’s sales figures showed some rebound.
A total of 58,035 properties changed hands in the city in 2023, a 2.7% drop compared with 2022 and the lowest figure since 1991, according to Land Registry’s data released Jan 3. The total value of transactions plunged 13.8% y-o-y to a 10-year low of HK$477.9 billion ($81.4 billion), the government data showed.
Nevertheless, analysts expect the city’s transacted sales to rise this month amid a pause in rate hikes, anticipation of rate cuts later in 2024, and a basket of rescue measures issued by the local government.
In December, transacted property sales rose 6.6% m-o-m to a three-month high of 3,764, while sales value jumped 29.8% to HK$33.59 billion, the Land Registry said.
Centaline Property Agency, one of the city’s leading property agencies, attributed the results to the government’s easing of stamp duties and the US Federal Reserve’s rate-hike pause.
“The figures reflect a sluggish market for the year of 2023 as interest rates soared and the local economy slowed down,” Yeung Ming-yee, senior associate director at Centaline Property
Research, said in a report on Jan 2.
Transactions in the new-home market rose 4.1% to 10,681 in 2023, with value rising 14.9% to HK$131 billion, compared with 2022, the agency said. However, the figures were the lowest in 10 years aside from 2022, which saw sales of 10,261 units valued at HK$114 billion.
Last month, 950 new homes worth HK$10 billion were sold, a 67.5% increase by volume and a 50.8% jump by value when compared with November. Centaline cited registrations for the first phase of Yoho West in Tin Shui Wai as a reason for the surge.
In the secondary market, 2023 sales added up to 29,690 units worth about HK$251.2 billion, Centaline said, as volume dropped by 6.6% y-o-y to the lowest level in 28 years and value fell by 10.9% to a seven-year low.
Sales of lived-in homes in December edged down 1% to 1,840 units compared with November, with total value rising 4.3% to HK$13.2 billion.
“The property market in Hong Kong is expected to witness steady growth, driven by multiple favourable factors that showed by the year’s end,” Derek Chan, head of research at Ricacorp Properties, said in a statement.
However, purchasing power may turn to lived-in homes in the short term because the latest new-home projects to launch have sold out and the next round has yet to come to market, Chan said. This may drive sales of second-hand homes above 2,000 units in January, he added.
Overall property transactions in January might rise 3% to 3,880 units, Chan said.
In October, Hong Kong Chief Executive John Lee Ka-chiu announced much-anticipated easing of decade-old cooling measures for the property market in his annual policy address. Specifically, the buyer’s stamp duty was halved to 7.5% for non-permanent residents and for residents buying a second or additional home; the special stamp duty, equivalent to 10% of a home’s price, was waived for owners who resell the property after two years, down from three years; and eligible workers from overseas are no longer required to pay stamp duty on properties unless they fail to become permanent residents.