Property transaction volumes hit lowest level in 10 years

There were only 101 big deals concluded in 2022.

The transaction volumes almost halved year-on-year (YoY) in 2022 with only 101 big deals completed, hitting the lowest level in the last 10 years as the Fed’s sharp interest rate and strict quarantine measures crimped the investment market recovery.

In a report, Colliers said the turnover, however, was only down by 4% YoY at $70b.

By sector, 33% of the turnover was from en-bloc residential/others, 26% was from industrial, 17% was from office, 13% was from retail, and 11% was from hotel/serviced apartments.

There were also at least six big foreclosure deals whilst distressed sales rose to the rate hikes and rebalancing of mainland China’s real estate market. In line with this, premises that offered high yield or distressed sales became hot spots in the last three months of 2022.

READ MORE: First-hand, second-hand residential transactions to hit new low in 2022

Thomas Chak, Co-Head of Capital Markets & Investment Services at Colliers Hong Kong, said investment volume is expected to increase by 5% in 2023 and will pick up momentum in the second half but is still subject to the full border reopening, as the Fed’s rate hike cycle is seen to peak early in the year.

“While retail and hotel sectors will be sought-after, we also expect Chinese buyers’ appetite for local assets to increase if the strong run of the USD and HKD comes to an end,” Chak said.

He added that distressed sales will also remain popular in the first quarter as they offer “bottom fishing opportunities” for investors, particularly for the cash-rich local investors and family offices.