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In Hong Kong, the number of property transactions has decreased.

In Hong Kong, the number of property transactions has decreased.

Concerns about rising interest rates and high property prices in Hong Kong are forcing investors to pull back, resulting in investment volumes reaching new lows.

According to recent data from Savills, transaction volumes for offices in Hong Kong fell 67 percent in the second quarter compared to the previous quarter. The number of luxury residential sales on Hong Kong island fell by 48% in the second quarter, to the lowest level since 1997 and lower than the third quarter of 2008, when the global financial crisis was at its height. apartment for sale in pearl qatar

According to Savills, owners in the residential, office, retail, and industrial segments are unwilling to lower prices, leaving just end users in the market.

"Government efforts have succeeded in halting price appreciation across most industries," according to Savills. "Speculators, funds, and other investors have all exited the market."

In the second quarter, there were just 282 transactions in the office market, compared to 862 in the first quarter. However, Savills maintains that prices remained reasonably steady because landlords "were in excellent financial positions and were undaunted by the demand reduction."

The recently implemented stamp duty, which hampered upgrading and investment demand, was blamed for the significant drop in luxury property purchases. The market has stopped due to a "withdrawal" of mainland purchasers and only a slight adjustment in prices, according to Savills.

"Vendors are taking a stubborn attitude with little pricing modifications, despite the fact that the demand pool for properties has been constrained to end users, and in redevelopment cases, developers," said Simon Smith of Savills Research in the report. "Volumes have taken a knock once more, returning to pre-global financial crisis levels."

A government double stamp fee and banks' lower loan-to-value ratio hurt the retail market. With less hope in the market, private commercial volumes fell 69 percent from the previous quarter and 66 percent from the previous year in the second quarter. During the second quarter, the market saw big lump-sum purchases by end users in non-core retail areas, such as the approximately 6,600-square-foot shops A and C in the Billionaire Avant, which sold for HK$226.4 million (HK$34,018 per square foot).

According to the report, the industrial sector had the worst performance in the second quarter, with only 25 transactions worth more than HK$30 million, down from 72 the previous quarter.

A recent analysis from Jones Lang LaSalle, similar to Savills' results, revealed a significant decline in direct commercial investment in Hong Kong as a result of numerous government policies.

Savills anticipates the same transaction volumes for the remainder of the year.

"Volumes in the second half may remain low, with the number of transactions likely to stay at similar levels as in Q2 over the following two quarters," the research reads. "As most suppliers in the commercial sectors have good financial histories and consequently tough negotiation postures," the study notes.

During the second half, the business forecasts a "real drop" in Hong Kong office pricing of up to 5%. Meanwhile, Savills predicts a five to ten percent drop in luxury home pricing as "landlords show signs of a willingness to discount inventories."

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