In 2021, Hong Kong's Luxury Residential Market Will Rebound.

Since the second quarter of 2019, the luxury residential market has seen its strongest performance.

According to the latest Residential Sales Market Monitor report from international property consultant JLL, Hong Kong's luxury residential capital values rebounded 0.8 percent q-o-q in the first quarter of 2021 after falling 8.2 percent in 2020, while luxury rents remained largely flat with a mild drop of 0.2 percent q-o-q; both recorded their best performance since the second quarter of 2019. al aaliya island

Following a decrease in infection cases in the city, home viewing activity increased and buyer sentiment improved during the quarter. In the first quarter of 2021, 42 homes worth more than HKD 100 million changed hands, which is up 31% from the same time last year but still well below historic levels. In addition, total consideration was around 55 percent higher than in 2020.

Senior executives from mainland Chinese companies have been active in Hong Kong's luxury market, according to JLL, with an ex-senior executive from a mainland China technology business purchasing a mansion on 77/79 Peak Road for HKD 598 million in February.

According to Nelson Wong, Head of Research at JLL in Greater China, "While there are signs of improving buyer sentiment in the housing market, we must be careful in our expectations for how quickly the luxury residential segment can rebound, given sales velocity remains slow. Factors such as the anticipated introduction of a vacancy tax, which will drive developers to proactively introduce additional high-end inventory units and apply some pricing pressure in the near term, can temper the market."

Norry Lee, Senior Director of JLL Hong Kong's Projects Strategy and Consultancy Department, added, "March saw a 108.3 percent increase in residential transactions of properties worth more than HKD 50 million, compared to the previous month. Employees of mainland Chinese corporations will provide a steady source of demand as more mainland Chinese corporations list and do business in Hong Kong, and this demand will continue to expand as more mainland Chinese corporations obtain Hong Kong resident status."

 

The volume of Class A office leasing in Hong Kong increased in Q1.

Central The vacancy rate in Hong Kong offices has improved slightly as the market shows signs of stabilization.

The leasing volume in Hong Kong's Grade-A office market improved in the first quarter of 2021, according to JLL's latest Hong Kong Property Market Monitor report, as occupiers resumed making real estate decisions.

Central's Grade-A office rents had declined 29.7% from the market top in early June 2019 to a more appealing level, and the submarket saw a positive net take up of office space (40,400 sq. ft) during the month. As of the end of March, central vacancy has reduced marginally from 7.5 percent to 7.3 percent. Rating agency S&P Global committed to office space in Three Exchange Square in Central, relocating from International Commerce Centre in West Kowloon, in a noteworthy leasing agreement.

JLL's Head of Office Leasing Advisory in Hong Kong, Alex Barnes, says, "As occupiers continue to execute real estate choices that were mostly subdued in 2020, office leasing demand will strengthen in the coming quarters. This demand will continue to be dominated by workplace enhancements and a flight to excellence."

"The negative pressure on the office market is expected to continue this year, but the overall rental decline in the second half of 2021 will be low. Overall, Grade-A office rents fell 0.5 percent month over month in March. Rentals in Kowloon East fell the most among major office submarkets, while rents in Central remained reasonably stable "Nelson Wong, JLL's Greater China Head of Research, commented.

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