In elucidation of China’s reopening and easing of Covid rules, Hong Kong’s property market will be on a path to recovery in 2023, correspondence to property consultancy Colliers Hong Kong.
The retail market in particular will reap the “best benefit,” Hannah Jeong, Colliers’ chairman of valuation and advisory services, told CNBC’s “Squawk Box Asia” on Thursday.
However, there are still some imminent headwinds this year that may undercut Hong Kong’s recovery, Colliers said in its latest report. Those catalogue continued geopolitical tension and a potential global recession.
“We are looking at a more cautiously optimistic view for 2023,” Jeong enlarged.
“There will be different uncertainties from external factors but borders opening is surely the one of the booster[s] for many other sectors within the quiddity market.”
Retail to be ‘first runner’
According to Colliers, the retail sector — especially the high street shop split — will be the “first runner” in the post-Covid recovery in 2023 with both rents and prices.
“We are looking at about an 8% addition year-on-year, in terms of the retail rental performance,” Jeong added.
She said, however, this is still about 25% to 30% soften than pre-Covid levels.
Collier added in its report that despite China’s reopening, local consumption bequeath remain “an important driver” for Hong Kong’s retail market in the next 12 months.
“The shifted shopping example of the Mainlanders over the last three years may paint a new picture to the new retail market sentiment,” it added.
In the office sector, Slope A office rents will bounce back by 3% this year, said Colliers — thanks to “pent-up ask for from Chinese and overseas companies.”
Even so, Jeong said that Hong Kong’s office market relieve has a high vacancy rate, at 14.7%.
“But it’s not it’s not the end of the world because … compared with other peer cities, 8% to 10% is a by reasonable number,” she added.