Hong Kong GDP growth strengthens real estate demand

The city’s leasing and sales activity will see a noticeable recovery.

Hong Kong’s strong GDP growth prediction of 3.5% to 5.5% for 2023 will increase the real estate demand across the city’s property sectors, according to CBRE Hong Kong, as they welcomed the 2023-2024 Budget.

The real estate and investment firm’s Head of Research, Marcos Chan, said that after Finance Secretary Paul Chan declared that Hong Kong would see a “visible rebound” this year, they expect a noticeable recovery in the city’s leasing and sales activity.

He added that the 3.0%-3.7% GDP growth forecast between 2024 to 2027 suggests a “long-lasting” recovery and will pave a sustainable demand for commercial estates in the next three to four years. “This will also strengthen investors’ confidence in the city’s medium-term outlook,” Chan said.

Chan also said that regarding the 2023-2024 Land Sale Programme, they foresee a limited interest in commercial sites among developers, despite the adequate supply in the office market.

He added that given the low vacancy in Hong Kong’s industrial property market, the government should consider launching more industrial sites for sale to address the market demand.

Chan also applauded the Hong Kong Government for giving $5k consumption vouchers per citizen for the third year, saying that it will ensure a solid retail market recovery. CBRE Hong Kong estimated that the vouchers are about 9% of 2022’s total retail sales.

He also added that the launch of the Capital Investment Entrant Scheme enhances the city’s position as an international financial hub and supports the growth of its asset and wealth management sectors.