Hong Kong new residential sales plummet 64% in December

There were only less than 900 transactions during the month.

According to a Knight Frank report, the interest rate cuts in the last quarter of 2024 stimulated the property market. Total residential sales recorded 53,099 transactions and HK$454.3 billion, reflecting annual increases of 23% and 17%, respectively.

The housing price index rose for two consecutive months, with a 0.1% MoM in November, resulting in a YTD decline of 6.6%, which aligns closely with our expectations.

Here’s more from Knight Frank:

However, new residential sales volume in December dropped drastically by 64% MoM, falling to less than 900 transactions, according to data from the Land Registry. As the new year begins, developers continue to actively attract buyers by offering various promotions for new projects.

For example, the third price list for Montagne in the Southside features 65 flats, with the lowest price at HK$19,366 per sq ft and an average price of HK$21,845 per sq ft after discounts – approximately 22% lower than the initial price list released 18 months ago.

Despite this, high net-worth buyers continued to seek luxury properties. One of the notable transactions included a 2,593-sq-ft flat at Villa Verde in The Peak, which sold for HK$73 million (or HK$28,153 per sq ft). In the leasing market, some mainland professionals have shown interests in units in The Peak, the Southern District, and Deep Water Bay Road, where monthly rents exceed HK$150,000. A significant leasing transaction in December 2024 was Tavistock in Mid-levels Central, where a 4,715-sq-ft flat was leased for HK$480,000 per month (or HK$102 per sq ft).

Meanwhile, the rental index decreased by 0.4%, marking the second consecutive month of decline, with talents from mainland and overseas remaining key drivers.

Looking ahead, market data indicates that as many as 30,000 new residential units could be launched across Hong Kong this year, with Kai Tak emerging as a significant hub. We anticipate that developers will expedite the sale of unsold inventory and initiate new projects, invigorating market activity in 2025.

Despite the market’s cautious stance due to potential US interest rate cuts, RMB depreciation, and the macroeconomic implications of the new U.S. administration, we remain cautiously optimistic that home prices could rise by up to 5% this year.