Hong Kong property deals almost doubled in Q3

Transaction volumes grew 93% to USD4.4 billion during the quarter.

Transaction volumes increased by 93% QOQ in Hong Kong in Q3, despite the US Federal Reserve’s sharp rate hikes prompting investors to put off their plans and affecting dealmaking in the quarter.

According to a Colliers report, only 25 major deals were recorded in the quarter, down 19% QOQ and 51% YOY. Yet several big-ticket sales underpinned transaction volumes, which increased by 93% QOQ to HKD34.2 billion (USD4.38 billion). 

The industrial segment dominated transactions in terms of number of deals; en-bloc residential transactions accounted for 63% of total deal value.

Here’s more from Colliers:

We expect investor sentiment to pick up in Q4 as market participants gradually digest the recent interest rate hikes and on expectations that Hong Kong will further relax quarantine and border control measures. 

Once the border is reopened, we expect shops in the core district will be sought after by local investors while in-demand industrial assets will continue to attract institutional investors. At the same time, the interest rate hikes also mean investors can expect to enjoy higher cap rates. 

Expert view 

The Hong Kong market offers plenty of opportunities to domestic and global investors. And while the border with the mainland is currently closed, the dealmaking witnessed in Q3 suggests global investors are betting Hong Kong will be the preeminent gateway to the Greater Bay Area and China over the long term.