Hong Kong’s real estate market is currently facing its most severe downturn in five years, according to a report by Bloomberg. Since 2019, the value of residential and commercial properties has plummeted by HK$2.1 trillion (approximately US$270 billion). With dwindling confidence in Hong Kong as a financial hub in Asia, property prices in the city continue to decline. Factors contributing to this phenomenon include the Chinese Communist regime’s crackdown on freedoms and the geopolitical tensions between the US and China.
This report highlights that the sluggishness in the Hong Kong property market signifies a loss of confidence for many residents. Wealthy real estate tycoons have seen their fortunes shrink, while existing homeowners are facing losses. Residential prices have dropped by about 29% since 2019, and the luxury housing market has also been severely affected. The vacancy rate for commercial properties is expected to reach 17% by the end of the year, with rents set to further decrease by 10%.
Bloomberg points out that the recovery of market confidence will take time, and investors and property owners need to come to terms with the reality of market value adjustments. Despite the Hong Kong government relaxing property purchase restrictions and introducing various talent schemes, the market anticipates further price declines, and short-term market confidence remains subdued.