Residential transaction volume to rebound in H1 2023

Developers are also expected to place their units for sale.

Hong Kong’s residential transaction volume is seen to post a “healthy rebound” in the first half of 2023 due to a low base comparison, CBRE said in a report.

During the residential property price correction from September 2015 to March 16 when it dropped 11.3% from its recent peak, and from July to December 2018 when it was down 9%, transaction volume also dropped significantly within a short period, CBRE said.

“With price correction bottoming, transaction volume rebounded immediately, as buyers took a wait and see approach entered the market without hesitation,” it said.

READ MORE: Residential prices to ‘bottom out’ in Q1 2023

CBRE said developers are expected to put their units up for sale this year “under pressure,” following record-low primary residential transactions of 10,315 units in 2022.

Total residential transaction volume declined by 39.4% year-on-year to 45,050 units, based on data from the Land Registry. For 2023, the total supply may reach over 45,000.

“To attract property buyers, we anticipate developers to adopt a more aggressive approach by rolling out various incentives strategically, including progressive payment mortgage as well as attractive mortgage plan,” CBRE said.

“Yet, face value may remain largely unchanged, as developers likely offer more cash rebates to property agencies, which in turn translates into price cut,” it added.