Fifth Wave Hits Hong Kong’s Property Sales in March 2022

Property sales in Hong Kong declined in March 2022, with the commercial real estate market bearing the brunt of the fifth wave of COVID-19 infections in the city.

The number of property deeds received for registration for all building units reached 3,828 in March, a 4.3% decline from February, according to data from the Land Registry. Year over year, this number crashed 57.8%.

The total consideration for these agreements was HK$34.8 billion in March, a decrease of 3.4% from a month ago and down 55.4% year over year.

The agreements included 2,869 residential units, equivalent to a total consideration of HK$26.9 billion.

Fifth Wave Hits Commercial Segment

Commercial properties bore the brunt of subdued demand during the first quarter of the year as the city’s economic momentum went south amid a fifth wave of COVID-19 cases, according to the latest report from real estate services and investment firm CBRE.

In particular, Grade A office rents dipped 0.6% between January and March compared to the year-ago period, while vacancy remained at 11.6% amid a slow take-up in new buildings. All submarkets registered a decline in office rents except for Tsim Sha Tsui, where rents were flat. The weakest was Hong Kong East, where rents fell 2.4% quarter over quarter.

“Like many property sectors, tenants in the office market were generally cautious when dealing with leasing matters in Q1 2022,” said Ada Fung, executive director, head of advisory and transaction services at CBRE Hong Kong. Fung expects leasing activity to pick up in the second half as more new projects roll out and business momentum returns.