Hong Kong’s property rallies are facing a worsening forecast, with house prices expected to fall by 10% this year after epidemic restrictions hit the city’s economy and expelled residents from the area.
The lower prices come after a series of developers, including Henderson Land, which is owned by Hong Kong’s second richest man, Li Shaoqi, recorded sharp declines in revenue in 2021.
Hong Kong property tycoons have amassed billions as a result Almost a monopoly On some of the most expensive real estate in the world. But the decline in revenues reflects an economic disruption caused by the terrain following Beijing’s zero cube policy.
Business leaders have warned of an uncertain recovery Without a clear exit Of the punitive restrictions, even after city leader Carrie Lam signaled for relief in a few steps starting in April.
The Hong Kong Real Estate Agency expects apartment prices to fall by 5% this year, while JLL Hong Kong expects them to fall by 5-10%. Goldman Sachs said this week that territory house prices could fall by 20% by 2025.
“[Many buyers] I do not see the rush at the moment, “said Hannah Jong, head of colliers and consulting services at Colliers Hong Kong.” We will look for even worse performances for [Hong Kong developers] In 2022. “
The departure of the residents and Transfer of executives By multinational companies may further reduce demand and adversely affect apartment prices in the city, according to JLL Hong Kong chairman Joseph Tsang.
A number of developers, including Henderson Land, recorded a decline in core profits last year, when malls and hotels in hotels in Hong Kong suffered from. Lower consumer demand. Henderson’s gross revenue from domestic property sales fell 24% in 2021, while the Kwak family’s Sun Hung Kai saw a 33% year-on-year drop to Hong Kong $ 7 billion ($ 900 million) in the second half of last year. .
Development of a new world, run by the heir of the Cheng family Adrian ChengIt reported that its Hong Kong property development revenues were down 72 percent compared to the same period last year.
“Prices will be weak until local restrictions are lifted and borders reopened,” said Michael Woo, an analyst at Morningstar. “It will all depend on the opening of borders to the continent and the world.”
Shops on Russell Bay in Causeway Bay – one of the world’s most expensive retail streets along Upper Fifth Avenue in New York and New Bond Street in London – are suffering from a shortage of visitors from China, experiencing a drop in rents of more than 20 per cent this year, according to recent government figures.
Analysts say Hong Kong’s entrepreneurs still have some distance from the continent’s liquidity crisis, which is reflected in Riots in Evergrande, The most indebted key in the world. Some developers in Hong Kong have chosen to push deeper into China while their rivals struggle.
“The New World is gathering some distressed assets” in the Gulf, a ring of cities in southern China that surround Hong Kong, Wu said. “I would see the situation as an opportunity to selectively acquire projects on the continent.”
A New World Development spokesman said the company was “optimistic” about its performance in 2022. Henderson Land and Sun Hong Kai did not respond to requests for comment.
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