Mike Rowse

Opinion | To buy or not to buy in Hong Kong’s volatile property market?

Over the decades, I didn’t panic when my house was worth HK$5 million and I didn’t celebrate at HK$50 million. This concrete box is my home

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Residential buildings under construction are seen in Kai Tak on September 2. From the point of view of potential buyers, if a price war is just starting, why not wait a bit longer to see who will cut next and by how much? Photo: Bloomberg

Mike Rowse

Published: 4:30pm, 8 Sep 2024

Hong Kong’s property market is going through one of its periodic shakeouts. Just about every sector is suffering at the moment.

Two new prominent grade A office buildings in Central are reported to be struggling to attract tenants. A four-star hotel up for sale has just had its asking price slashed by 40 per cent – from HK$1 billion to HK$600 million. Empty shops can be seen everywhere.

The most prominent case might be the luxury mall at the 1881 Heritage site in the prime shopping district of Tsim Sha Tsui, reported to have only three tenants now. In nearby Canton Road, a shop previously occupied by a watch brand has been taken over by a bank after the rent was cut by 80 per cent. There are similar stories around Causeway Bay.

Near where I live is a stretch of four street-level shop units that might serve as a microcosm of the current market situation: one is an empty retail store; it is surrounded by three property agent offices.

Despite the clear writing on the wall, some landlords still don’t get the message. Recently, there was a popular tea cafe in Kwun Tong that had to close down because of a proposed major rent increase. The space was subsequently let to a different tenant for the reduced rate that the tea shop had been prepared to pay.

I am aware of office space in Admiralty which was left vacant for a year when the old tenant and landlord were unable to agree. It was later let to a new tenant at a price the outgoing one had offered to pay.