Hong Kong’s property market is seeing more deals as buyers bet that the border with China reopening will help channel more capital into the territory and stoke a recovery.
The number of transactions in 35 major residential projects jumped to an eight-month high in the two weeks through Sunday, Midland Realty (美聯物業) said.
That is an encouraging sign for a market where combined new and used home sales slumped last year to the lowest level since at least 1996, data tracked by Centaline Property Agency (中原地產) showed.
The border between China and Hong Kong started to gradually reopen on Sunday after being effectively sealed since early 2020.
“The confirmation of the first phase of border opening can facilitate the exchange between the mainland and Hong Kong, bringing Hong Kong the long-absent Chinese capital,” said Sammy Po (布少明), chief executive officer of Midland’s home division. “It will stimulate the asset price to rise.”
Midland estimates that used home transaction registrations are to reach a seven-month high this month.
A family office with a Chinese background recently bought more than 10 apartments for about HK$100 million (US$12.8 million), said Edmund Pang (彭文浩), a senior district sales director at Midland whose team brokered the deals.
The buyer had been on the hunt for nearly five months, and news of the border reopening helped speed up their decision to purchase, Pang said.
“They think that both talent flow and economic activities will pick up between the two places soon,” he said.
Some analysts are already forecasting a recovery for Hong Kong’s residential sector.
Morgan Stanley expects peaking interest rates and a reduced exodus following the easing of travel curbs to support the market in the coming year.
The firm said that property prices would bottom out in the second quarter and eventually increase by 5 percent for the full year.
However, it is too early to say that the property market is headed for a recovery. It is unclear how much Chinese capital will flow into real estate following eased border controls.
Used home values in Hong Kong last year declined about 16 percent as borrowing costs increased along with a shrinking economy.
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