Housing market of Hong Kong benefits from China’s policy stimulus, plus other news

For PropertyGuru’s real estate news roundup, recent rate cuts and rising stock prices offer positive news for Hong Kong’s property market. In other news, Thailand’s stimulus committee is scheduled to discuss more measures, including those for the real estate sector, to prod property buyers and developers to create a comprehensive impact. Lastly, Manila remained the third most affordable city for prime office rents in the Asia Pacific region in the third quarter of 2024.

Hong Kong housing market benefits from mainland China policy stimulus

Recent rate cuts and rising stock prices offer positive news for Hong Kong’s property market. However, the weak economy and cautious pricing from developers persist. With 109,000 housing units available and a potential influx from the primary market, pressure on secondary market prices will remain, according to JLL’s latest Residential Market Monitor.

Bruce Pang, Head of Research at JLL Greater China, noted in The World Property Journal: “While multiple rounds of government policy easing on residential mortgages and stamp duties have collectively improved affordability more than this single 25 bps rate cut, they have not yet restored sustainable buyer confidence. The rate reduction alone is unlikely to reverse the ongoing downward trend, as the property market is primarily influenced by Hong Kong’s broader economic conditions.”

Primary market transactions in the first eight months of 2024 have already surpassed the total for all of 2023. Cash-rich buyers, who are less affected by interest rates, have already entered the market. Therefore, repeating this high level of activity is unlikely. Following the recent rate cut, the primary market recorded 94 transactions in one week, representing just 10.2 percent of the 918 deals seen during the first week after the relaxation of cooling measures.

More property stimulus could be on the way in Thailand

The stimulus committee is scheduled to meet late October to discuss more measures, including those for the real estate sector, says Deputy Finance Minister Paopoom Rojanasakul.

Mr Paopoom said the real estate stimulus measures would target both demand and supply, aiming to prod both property buyers and developers to create a comprehensive impact.

He said in the Bangkok Post report that new stimulus measures were needed because the existing ones were fully utilised.

The Finance Ministry recently utilised state financial institutions, such as the Government Housing (GH) Bank, to support real estate stimulus. In April, GH Bank launched a low-interest loan programme called “Happy Home” with a total loan amount of THB20 billion. This scheme offered flexible lending conditions to help low-income individuals access mortgages, with a maximum loan amount of THB3 million per person and a fixed interest rate of 3 percent for the first five years. However, this programme reached its loan limit.

Manila is still the third cheapest for prime office rent in Asia Pacific

Manila remained the third most affordable city for prime office rents in the Asia Pacific region in the third quarter, according to real estate consultancy Knight Frank.

On an annual basis, Manila’s occupancy cost fell by 1.7 percent, slightly below the average 2.5 percent decline in the region, a Knight Frank Asia report released on 22nd October showed. The average prime office cost in Manila was USD29.64 per square foot (sq.ft.) in the July-to-September period.

“Prime rents in the region fell just 0.1 percent on a quarter-on-quarter basis, signalling that rents could be bottoming out, supported by growth in Indian markets,” Knight Frank said in BusinessWorld.

Kuala Lumpur had the lowest average prime office rent in the region at USD20.57 per sq.ft., followed by Jakarta (USD26.75), Phnom Penh (USD34.13), Guangzhou (USD35.60), and Bengaluru (USD36.17).

The most expensive rent for prime office space was in Hong Kong SAR (USD155.52), followed by Singapore (USD125.66), and Sydney (USD99.75).

The Property Report editors wrote this article. For more information, email: [email protected].