Hong Kong residential land prices fall up to 20pc in first half, says JLL
Local developers sat on their hands, while bidding interest from mainland also started to cool
Land prices in some districts of Hong Kong fell as much as 20 per cent in the first half of 2016, despite sustained mainland interest in residential sites, as local developers sat on their hands in view of a dim market outlook and weakening economy.
“Five out of eight sites sold via government public tender in the first half of 2016 did not meet the lower end of market expectations,” according to figures from JLL’s mid-year Land and Property Review 2016, released Thursday.
During the second quarter of this year, bidding interest from mainland developers also started to cool, and JLL predicts a further downward trend to continue in short term.
Joseph Tsang, managing director and head of capital markets at JLL, forecasts that “capital values of mass residential properties will drop 10-15 per cent, while luxury residential will decline 5-10 per cent”.
In addition, he said “uncertainties in the interest rate outlook and flagging results in the government’s land sales market” will place further pressure on Hong Kong land sales, which is a major revenue stream of the Hong Kong government.
Five out of eight sites sold via government public tender in the first half of 2016 did not meet the lower end of market expectations
Midland Realty’s latest figures released this week recorded “the worst six-month numbers” in 26 years, with overall property sales in Hong Kong plunging 39.1 per cent to 26,571 deals from 43,636 deals since the start of the year, and sales values down 39.2 per cent in the last six months to HK$189.5 billion.
