Hong Kong Halts Commercial Land Sales for Seventh Consecutive Quarter
Hong Kong's government has announced that it will not sell any commercial land in the quarter from October to December, citing low demand and high office vacancy rates.
Hong KongCommercial Land SalesOffice Vacancy RatesProperty MarketInterest Rate CutsReal EstateOct 04, 2024
Development Secretary Bernadette Linn added that the government may miss its target of supplying land to build 13,200 flats in the current financial year ending in March, as it plans to sell just one small residential site this quarter. Linn cited low demand in the property market, despite a recent interest rate cut, and noted that it will take time for the market to position its strategy. Hong Kong's private home prices have dropped for the fourth consecutive month, with potential buyers keeping to the sidelines ahead of interest rate cuts.
The city's banks surprised the market in September with a cut of 25 basis points in their best lending rate, after the U.S. Federal Reserve cut its rate. Home prices in one of the world's most expensive property markets have tumbled 26.6% from their 2021 peak, staying at their lowest level since September 2016, hurt by higher mortgage rates, an outflow of talent, and a weak market outlook.
Frequently Asked Questions
Why has Hong Kong's government halted commercial land sales for the seventh consecutive quarter?
The government has cited low demand and high office vacancy rates as the reason for halting commercial land sales.
What is the expected vacancy rate in Hong Kong's office sector by 2027?
According to real estate consultancy Savills, the vacancy rate is expected to rise to 17% by 2027 from 14.8% currently.
How many flats is the Hong Kong government targeting to supply in the current financial year?
The government is targeting to supply land to build 13,200 flats in the current financial year ending in March.
What is the current state of Hong Kong's private home prices?
Hong Kong's private home prices have dropped for the fourth consecutive month, with potential buyers keeping to the sidelines ahead of interest rate cuts.
What is the current level of home prices in Hong Kong compared to their 2021 peak?
Home prices in Hong Kong have tumbled 26.6% from their 2021 peak, staying at their lowest level since September 2016.
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