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In light of China’s reopening<\/a> and easing of Covid rules<\/a>, Hong Kong’s property market will be on a path to recovery in 2023, according to property consultancy Colliers Hong Kong.\u00a0\u00a0<\/p>\n The retail market in particular will reap the “best benefit,” Hannah Jeong, Colliers’ head of valuation and advisory services, told CNBC’s “Squawk Box Asia<\/a>” on Thursday.<\/p>\n However, there are still some potential headwinds this year that may undercut Hong Kong’s recovery, Colliers said in its latest report<\/a>. Those include continued geopolitical tension and a potential global recession<\/a>.<\/p>\n “We are looking at a more cautiously optimistic view for 2023,” Jeong added.<\/p>\n “There will be different uncertainties from external factors but borders opening is surely the one of the booster[s] for many other sectors within the property market.”\u00a0<\/p>\n<\/div>\n According to Colliers, the retail sector<\/a> \u2014 especially the high street shop segment \u2014 will be the “first runner” in the post-Covid recovery in 2023 with both rents and prices.\u00a0<\/p>\n “We are looking at about an 8% increase year-on-year, in terms of the retail rental performance,” Jeong added.\u00a0<\/p>\n She said, however, this is still about 25% to 30% lower than pre-Covid levels.<\/p>\n Collier added in its report that despite China’s reopening, local consumption will remain “an important driver” for Hong Kong’s retail market in the next 12 months.<\/p>\n<\/div>\n “The shifted shopping pattern of the Mainlanders<\/a> over the last three years may paint a new picture to the new retail market sentiment,” it added.\u00a0<\/p>\n In the office sector, Grade A office rents will bounce back by 3% this year, said Colliers \u2014 thanks to “pent-up demand from Chinese and overseas companies.”\u00a0<\/p>\n Even so, Jeong said that Hong Kong’s office market still has a high vacancy rate, at 14.7%. <\/p>\n “But it’s not it’s not the end of the world because \u2026 compared with other peer cities, 8% to 10% is a generally reasonable number,” she added.\u00a0<\/p>\n<\/div>\n Hong Kong’s home prices plunged to a five-year low<\/a> in October as interest rates hikes pushed up borrowing costs.\u00a0<\/p>\n This resulted in a “softening of investment demand,” said Jeong, but the demand from homebuyers still exists.\u00a0<\/p>\n “Homebuyers \u2026 [have been] utilizing this time when market is softening, they can snatch the cheaper flats,” she added.\u00a0<\/p>\n<\/div>\n “But in 2023, I think the interest rate … will continue to go up. We are looking at stabilization at least in the second half of this year.”<\/p>\nRetail to be ‘first runner’<\/h2>\n
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Residential market demand to dampen\u00a0<\/h2>\n
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