Investment in Hong Kong property set for turnaround in 2024 after hitting 15-year low last year, Colliers says
- Only 65 major deals were completed last year as borrowing costs surged to a 22-year high, property consultancy says
- Colliers forecast contrasts with CBRE survey that suggests Hong Kong-based investors are the most unlikely to acquire real estate assets in 2024
“While the market expects the US Federal Reserve’s interest rates to stabilise in the next six to nine months, coupled with the [Hong Kong] government’s initiatives [such as] ‘Headquarters Economy’ and the Capital Investment Entrant Scheme [CIES], this is likely to improve investment sentiment and re-establish Hong Kong as an investment destination,” said Thomas Chak, co-head of capital markets and investment services at Colliers Hong Kong.
Last year, only 65 major deals were completed as borrowing costs surged to a 22-year high, with the Hong Kong Monetary Authority (HKMA) hiking interest rates by a cumulative 5.25 per cent since March 2022 to keep the local currency’s peg with the US dollar. The HKMA must act in lockstep with the US Federal Reserve, which is executing an aggressive campaign against red-hot inflation in the world’s largest economy.
Institutional funds accounted for only 9 per cent of the deals last year, while end users contributed about 40 per cent, Colliers said. Data from 2019 to 2022 shows funds made up between 18 per cent and 46 per cent of total investment in Hong Kong.
“Institutional investors, who are rate-sensitive, looked for assets yielding over 4 per cent,” Chak said.
