Economic Recovery Brings Total Residential Transactions to 9-Year High Home Prices Expected to Increase 5% in Second Half of 2021 and Return to 2019 High in Third Quarter | Taiwan News
- The economic recovery in Hong Kong led to a 20% increase in residential transactions quarter-on-quarter, reaching a nine-year high and its peak since 2012
- The supply of new homes over the next two years remains low at an average of around 19,100 units per year
- Home prices are expected to rise 5% in the second half of 2021 and return to the peak of June 2019 ahead of social events and the pandemic outbreak in the third quarter
HONG KONG SAR – Media reach – June 8, 2021 – Global real estate services company Cushman & Wakefield is today releasing the Hong Kong residential market review and forecast for the second quarter of 2021. The steady economic recovery, falling unemployment rate and stabilizing the pandemic situation have helped to significant growth in the Hong Kong real estate market in the second quarter, in particular for the residential market. The residential transaction peaked in nine years in the first half of 2021. Home prices are expected to return to their peak in the third quarter to a level before the COVID outbreak and social events. The resumption of China-Hong Kong travel in the second half of 2021 is expected to attract buyers to the mainland, providing more favorable conditions for an overall recovery in the local real estate market.
In the first two-month period of the second quarter of 2021, the aggregate total of sale and purchase (S&P) agreements stood at 18,590 cases. The combination of about 9,500 cases in June brings quarterly transactions to 28,090 cases, an increase of 37% year-on-year or 20% quarter-on-quarter. Residential transactions increased 20% quarter-on-quarter to 21,709 cases, for a total of 39,840 cases in the first half of 2021, the highest since 2012 and a nine-year record.
Mr. Keith chan, Director of Cushman & Wakefield, Head of Research, Hong Kong, mentions: “The economy of Hong Kong shows the first signs of picking up with 7.9% year-on-year growth in the first quarter and warped a six-quarter contraction. With an improving labor market where the unemployment rate fell to 6.4% and the fourth wave of the COVID epidemic under control, housing market sentiment has warmed as house prices in April rose. of 4.1% year-on-year. Residential transactions in the first four months of 2021 were dominated by secondary sales which rose 81%, up from 74% in 2020. This number has returned to the traditional ratio of secondary sales to primary sales of 80-20%. “
According to the analysis of Mr. Edgar Lai, Director of Assessment and Advisory Services at Cushman & Wakefield, Hong Kong, the mass residential and luxury residential markets exhibit similar trends. Average prices of subdivisions in multiple neighborhoods have increased by more than 10% to date since this year. Take the example of City One Shatin, the average price increased 5.4% in the second quarter, more than 10% since this year, and recorded “five consecutive increases”, the average price approaching its peak of June 2019 The average price of Taikoo Shing also increased 5.7% quarter-on-quarter and is expected to register an increase of 15.3% by the end of June. The luxury home market also rebounded, with Bel-Air up 9.3% in the second quarter. This upward trend is expected to continue.
As for the supply of private housing in the future, a more reasonable number of around 19,100 new units per year are expected in the pipeline over the next two years. Although slightly higher than the average annual supply of 14,300 units over the past ten years, the number remains low compared to the average of 26,600 units from 1991 to 2000.
Mr. Alva To, Vice President of Cushman & Wakefield, Greater China and Head of the Board, Greater China, commented: “Residential transactions in the second quarter were dynamic with an increase in both volumes and prices. The tight supply of new residential properties contributed favorably, but support mainly came from better than expected economic growth, persistently low interest rates, Looking ahead, we expect that with the resumption of cross-border travel to the second half of this year, mainland buyers will boost sales of local properties. will remain active in the second half of this year, with a margin for a 5% price hike, or 10% for the full year, and in the third quarter it could return to its all-time high before the onset of social events in June 2019 and the pandemic. The luxury residential market is expected to grow another 5-10% during this year. “
About Cushman & Wakefield
Cushman & Wakefield (NYSE: CWK) is a leading global real estate services company delivering exceptional value to real estate occupants and owners. Cushman & Wakefield is one of the world’s largest real estate services companies with approximately 50,000 employees in more than 400 offices and 60 countries. In Greater China, 22 offices serve the local market. The company won four of the best awards in the Euromoney Survey 2017, 2018 and 2020 in the categories Global, Agency Letting / Sales, Valuation and Research in China. In 2020, the company had $ 7.8 billion in revenue in key property management, facilities and projects, leasing, capital markets, appraisal and other services. . To learn more, visit www.cushmanwakefield.com.hk or follow us on LinkedIn (https://www.linkedin.com/company/cushman-&-wakefield-greater-china).
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