Hong Kong Property Prices To Mirror UK Property?

Following a scrap on decade-long property market restrictions on non-permanent residents and second-home buyers in February 2024, Hong Kong property is due to see a resurgence in demand and appreciation.

According to Salina Li of South China Morning Post, Homebuyers are returning to the market “enjoying the additional bonus of sizeable discounts on offer as cash-strapped developers try to maximise the rush of pent-up demand.” Stamp duty on domestic and foreign investment is amongst the measures seeing redaction. As a result buyers are snapping up multiple properties.

But will Hong Kong reach the growth levels of the UK property market soon or is this just a flash in the pan?

What Do Industry Experts Think?

Hong Kong is one of the most expensive housing markets in the world currently. Experts however, expect it to simmer down into a new normal “in which skyrocketing and often volatile home prices ” become “a thing of the past”, writes Salina Li in the SCMP.

Donald Choi, Executive Director and CEO of Chinachem Group, believes that the recent recovery and growth is “primarily driven by pent-up demand”. He goes on to say, “Hong Kong’s property market will remain relatively stable in the future. A healthy market is where there is supply in the market and property prices rise with inflation.” This marking a similar trend to the UK property market.

Experts On The Numbers

There was a spike in the volume of transactions right after the redaction of restrictions. 3,971 new and secondary residential units exchanging in March. This marking a rise from April by 67%. The highest since May last year with 4,003 homes exchanging, according to Land registry data.

Promising though it seems this did not translate to higher purchase prices. Meaning the removal of restrictions has yet to add to the capital appreciation of Hong Kong property.  It presents as yet another area not in lock step with the UK property market. A market where we constantly see property appreciate. This on the behest of changes in government, legislation changes and generally with inflation. Historically this is due to an understanding that as property in the Uk appreciates at a constant. It’s due to a series of factors some economical and some based on career opportunity and migration. UK property will always be in demand.

Joseph Tsang, Chairman of JLL Hong Kong, Property Consultancy, backs the previous up by stating, “Although transactions are more active, instead of an increase in prices, we are seeing a further reduction.” He believes “the market is unlikely to rebound back to its peak.” It’s largely due to a lack of demand being evident as new residential projects retain high inventory volumes after completion.

Hong Kong is known for having limited supply and high demand with property prices having jumped 271.7 percent since 2009. These days though, Hong Kong has over 20,000 completed and unsold units on the market. An analysis provided by Norry Lee, Senior Director of the Projects Strategy and Consultancy Department at JLL Hong Kong.

Investing In UK Property

Investing in UK property has long been a route for Hong-Kongers building investment portfolios and that trend has continued. Currently overseas investment counts for 51% of investment into the UK property market with 19% of which has come from Hong Kong, according to the NRLA.

There are many reasons as to why investing in UK property is so popular with investors from Honk Kong:

• “The UK property market has a history of retaining its value and delivering a return on investment” – Optimise Accountants
• “113,000 Hong-Kongers have been granted visas to the UK through new British Nationals Overseas (BNO) scheme.” – Optimise Accountants
• “British National Overseas visa is a type of visa issued by the UK government that allows Hong Kong nationals to enter and live in the UK for up to five years. This visa allows you to purchase property in the UK” – NeedingAdvice.co.uk
• “Most of the potential tenants are willing to pay 3 to even 6 months’ rental payment in advance, or add an extra 10 to 20% higher monthly rental payment in total in order to secure for their desired rental property” –  PropHome
• “The UK property market offers a wide range of investment opportunities, including residential, commercial, and alternative property assets… there are diverse options to suit various investment strategies and risk appetites” – Fraser & Co.

Assessing Your Options

Are your interested in beginning or adding to your investment portfolio? Is Hong Kong on the list of your preferred locations? Or maybe the broader APAC region as a whole? – If so get in touch with our dedicated APAC team now, and we will help you through your investment journey!