Hong Kong property investments surge 52% to USD2.2b in Q2

The total investments for H1 is now at USD3.7b.

The record-high rate hike by the US Federal Reserve caused investors to delay their decisions during the second quarter of 2022, but Colliers believes market sentiment will recover in the second half of the year on the back of an improving economic outlook. 

According to a Colliers report, real estate investment transactions in Hong Kong picked up in Q2 - boosted by the relaxing of social-distancing measures - from the low base set in the previous quarter. Volumes for commercial properties rose 52% QOQ to reach HKD17.4 billion (USD2.2 billion) in Q2, but were 29% lower YOY. This brings the total investment volume in H1 2022 to HKD28.9 billion (USD3.7 billion), down 15% YOY. The US Fed’s interest rate hike meant the market recovery was relatively slow, as some investors switched to a more cautious ‘wait-and-see’ approach.

Here’s more from Colliers:

While the government expects a revival in economic activity throughout 2022, we believe investment momentum also will pick up in H2 if the public health situation remains under control. Supported by strong demand and rental performance, industrial assets will remain the most preferred asset type. 

Meanwhile, co-living and residential developments continue to attract interest given the city’s ongoing housing needs. We expect to see funds and real estate firms, which accounted for 87% of the investment volumes seen in Q2, to continue to drive the investment market through the rest of the year.