Real Estate - Hong Kong

Hong Kong

The Real Estate market market in Hong Kong is expected to reach a projected value of US$3.82tn in 2024.
Among the different segments of the market, Residential Real Estate holds the highest share, with a projected market volume of US$3.03tn in 2024.
This segment is anticipated to exhibit a Compound Annual Growth Rate (CAGR) of -0.80% from 2024 to 2029, resulting in a market volume of US$3.67tn by 2029.
In a global context, United States is expected to generate the highest value in the Real Estate market market, reaching US$132.0tn in 2024.
Hong Kong's real estate market continues to experience soaring prices, fueled by high demand and limited supply.

Key regions: United States, China, Japan, Germany, United Kingdom

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Analyst Opinion

The Real Estate market in Hong Kong has been experiencing significant developments and trends in recent years.

Customer preferences: In Hong Kong, customers have shown a strong preference for residential properties located in prime areas with convenient access to amenities and transportation hubs. The demand for luxury properties has also been on the rise, driven by high-net-worth individuals and foreign investors seeking safe haven assets. Additionally, there has been an increasing interest in eco-friendly and sustainable properties, reflecting a growing awareness of environmental issues among customers.

Trends in the market: One of the prominent trends in the Hong Kong Real Estate market is the high demand for compact and efficient living spaces. Due to limited land availability, developers have been focusing on building smaller units that maximize the use of space. This trend is driven by the rising cost of property ownership and the desire for affordable housing options in a densely populated city. Another trend in the market is the increasing popularity of co-living spaces. With the rise of the sharing economy and changing lifestyles, young professionals and expatriates are seeking flexible and community-oriented living arrangements. Co-living spaces provide shared amenities and social activities, catering to the needs of this target market.

Local special circumstances: Hong Kong's unique geographical constraints and limited land supply have contributed to the high property prices in the city. The government has implemented various measures to address the issue, such as increasing land supply through reclamation projects and promoting the development of new towns in the New Territories. However, these efforts have been met with challenges and have not fully alleviated the housing shortage.

Underlying macroeconomic factors: The Real Estate market in Hong Kong is closely influenced by macroeconomic factors such as interest rates, economic growth, and government policies. Low interest rates have made it more affordable for buyers to finance their property purchases, stimulating demand in the market. Economic growth, particularly in the financial services sector, has attracted foreign investors and professionals to the city, further driving demand for real estate. Government policies, including stamp duty measures and cooling measures, have been implemented to curb speculation and stabilize the market. These policies have had varying degrees of impact on the market, influencing buyer behavior and market dynamics. In conclusion, the Real Estate market in Hong Kong is characterized by customer preferences for prime locations, compact living spaces, and sustainable properties. The market is influenced by local special circumstances such as land scarcity and high property prices. Macroeconomic factors, including interest rates and government policies, also play a significant role in shaping the market trends and developments.

Methodology

Data coverage:

Figures are based on value of residential and commercial real estate, average real estate value, residential estate transactions and leases.

Modeling approach / Market size:

Market sizes are determined by a combined Top-Down and Bottom-Up approach, based on a specific rationale for each market segment. As a basis for evaluating markets, we use data from international organizations and industry associations. Next we use relevant key market indicators and data from country-specific associations such as GDP, price level index, household wealth, household size, number of renter and owner households, housing consumer spending per capita. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. For example, exponential trend smoothing. The main drivers are GDP per capita, population, number of renter and owner households, price level index, housing consumer spending per capita.

Additional Notes:

The market is updated twice per year in case market dynamics change. The impacts of the Russia-Ukraine war are considered at a country-specific level.