Savills

Publication

Hong Kong Residential Sales - Jan 2023

Border reopening to boost sentiment

Some eye-catching super luxury deals completed towards the end of the year reflect a revival of sentiment.

  • The stock market rebound and an easing of COVID restrictions in Hong Kong lessened negative sentiment in the luxury market at the end of the quarter, while escalating borrowing costs remain a key concern.
  • Some eye-catching deals, such as the sale of the luxury site at 5 Mount Cameron Road for HK$1 billion reflected a revival of sentiment towards the end of 2022.
  • The proportion of Mainland buyers in the luxury market hit a new low in 2022 as prolonged border closure, muted business prospects and changing policies all affected Mainland UHNWIs’ appetite for trophy assets in Hong Kong.
  • Luxury volumes continued to shrink in Q4 across most price brackets, with the few high-profile deals supporting volumes in the HK$200m+ bracket.
  • Border reopening should improve investment sentiment in general, while the potential influx of Mainland professionals and middle management may boost buyer profiles for luxury apartments in emerging areas such as West Kowloon and Tseung Kwan O.

Luxury volumes have continued to shrink but the reopening of the border should bring back Mainland professionals with an appetite for luxury apartments in emerging areas.

Simon Smith, Savills Research & Consultancy