CBRE: There is a big opportunity for the Hong Kong property market to stop falling and rebound in the coming months.

On March 4, the Hong Kong Land Registry released the statistics for February. Kelvin Kuo, Executive Director of Valuation and Advisory Services at CBRE Hong Kong, stated that although transaction volume in February decreased, there is a great chance for the volume to rebound in the coming months, especially for units priced below 4 million Hong Kong dollars. The Hong Kong government has reduced the stamp duty for residential units below 4 million Hong Kong dollars from the original 1.5% rate to only 100 Hong Kong dollars. This measure will stimulate demand for properties priced below 4 million Hong Kong dollars. Kuo mentioned that the demand for properties mainly comes from users who were previously adopting a wait-and-see attitude, especially newlyweds. Since property prices have already dropped by 27.8% from the peak, properties are now relatively cheaper. Furthermore, Kuo stated that with the continuous increase in rental returns, policies may attract investors to enter the market. Currently, the rental yield for Class A properties (less than 40 square meters) has exceeded the actual mortgage rates. He predicts that developers will launch more units priced below 4 million Hong Kong dollars to meet the growing demand and ease the pressure on unsold units. Kuo stated that by 2024, properties valued below 4 million Hong Kong dollars will account for 25% of the total transaction value of private residential properties, and it is expected that by 2025, units with prices below 4 million Hong Kong dollars will constitute around 30% of the market transactions.