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

Transactions will reach between 48,000 to 53,000 in 2023 from 45,000 in 2022.

Transactions of first-hand and second-hand properties for 2022 are expected to hit a new low of only 45,000, according to Knight Frank.

Martin Wong, director and head of Research & Consultancy, Greater China, prices in 2022 will decline by nearly 15% due to the weak local stock market, decreasing labour force, increasing mortgage rates, and the deterioration of the local economic situation.

“Unless the government eases property cooling measures, it is unlikely for home prices to rebound in the short term due to the lack of positive news in the market. The competition between first-hand and second-hand markets has intensified owing to the slowdown of the pace of new project launches and stockpiling of unsold flats,” Wong said.

With the poor property market performance, the Government’s land sales revenue is seen to drop 68% year-on-year (YoY) to $35b in 2022.

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Meanwhile, prices of mass residential properties are expected to fall by 5% to 10% in 2023, with homeowners feeling the impact of the current real interest rate exceeding 3% on their purchasing powers.

Wong added that luxury residential property prices will decline by 0% to 5%.

The volume of first-hand and second-hand transactions is expected to increase to between 48,000 and 53,000, with first-hand transactions accounting for 30% of the total.

The sale of certain sites in the government’s land sale programme is expected to be delayed until 2023, with the revenue seen to reach between $50b to $70b, whilst the land premium will reach between $35b to $40b.