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Property News Weekly Digest
〈The Standard, July 16, 2022〉Medical groups are expanding in the market and rushing to rent big commercial buildings in prosperous districts.

The pandemic has raised public awareness of the need for health care and hygiene, which has led to a surge in demand for medical-related services, and sales of private medical service buildings have risen steadily.

Rents of shops and office buildings have fallen, and medical services have taken the opportunity to expand aggressively.

Marcos Chan, the executive director and head of research at CBRE, said office rents had dropped by about 30 percent from the peak in 2019, while rents for street shops also fell by nearly 40 to 50 percent from the high point of that year.

〈Hong Kong Business, July 16, 2022〉Colliers said it expects the Grade A office rental market in Hong Kong to decline 2% in 2022 because it will be pressured by the potential new office supply in the second half of the year.

In its report, the property analyst said there could be 3.9 million square feet (sq ft) of new Grade A supply, which can raise the year-end vacancy and will pose pressure on rental outlook.

Fiona Ngan, head of office services at Colliers, said the rental gap between non-central districts and central business district will also narrow whilst rents in Kowloon will pick up.

〈Hong Kong Business, July 14, 2022〉The capital market recovery in Hong Kong stayed slow, partially due to the US Federal Reserve interest rate hike, with some investors adopting a wait-and-see approach on investing for commercial properties, Colliers said.

Te recorded total investment volume for commercial assets declined 15% year-on-year in the first half (H1) of 2022 to $28.9b. This, despite the increase of investment volume for commercial properties by 52% in the first quarter of 2022.

“Residential development sites and co-living assets offer opportunities to local developers and funds whilst neighbourhood retail will continue to gain traction in the second half (H2) of this year given its resilient performance,” Colliers said on the pent-up demand for the housing sector.

Meanwhile, institutional funds and real estate firms, which accounted for 87% of the investment volume in the second quarter, should remain the key market driver for the rest of 2022, Colliers also said.

〈Asian Post, July 13, 2022〉With the expected increase in average mortgage rates, JLL sees mass residential value in Hong Kong to drop 5% to 10% in 2022.

In its report, JLL said the price of mass residential was down 3.9% in the first half (H1) of 2022 as the housing market faces challenges with the interest rate.

Meanwhile, the average monthly transaction volume for residential properties rebounded by 48.4% quarter-on-quarter (QoQ) to 4,975 sales in the second quarter (Q2) of 2022.

For the prices of luxury residential capital values, it went down by 1.3% in H1 2022. But in Q2 2022, sales of luxury residential rebounded by 1.2% QoQ in Q2 2022.

〈The Standard, July 12, 2022〉A rebound in the pandemic has sparked a drop in property transactions. Banks are also cautious while valuations have fallen slightly.

The number of housing estates that are seeing higher bank valuations fell from nine to seven.

Valuation increases at the seven housing estates ranged from 0.3 to 1.53 percent, according to a report on bank valuations of the 20 major estates.

The industry expects the primary market to continue to be the focus in the short term, and bank valuations will remain within a narrow range.