Jones Lang LaSalle forecasts drop in Hong Kong home prices

Around 20,000 new residential units are expected to hit the market this year to bring down the prices.

According to JLL's Hong Kong Residential Sales Market Monitor report, the fifth wave of Covid-19, which raged through Hong Kong in early 2022, resulted in a 3.2% decline in home prices from the previous quarter.
JLL has revised its forecast for 2022 mass residential market capital values, suggesting a dip of around 5% compared to the previously predicted 0-5% growth.
“In the first quarter of 2022, mass residential capital values declined by 3.2% while luxury residential capital values dropped 2.5%.  But as the pandemic stabilizes, we expect the activity level in the housing market to bounce back to a high level similar to 2021. Driven by pent-up demand, potential buyers will support the housing market upon the relaxation of social distancing measures. We expect a high concentration of launches in the second half of 2022, with potentially over 20,000 units to be issued with pre-sale consent in the year, similar to the previous peak in 2018. Combined with the factor of increasing interest rates, housing prices will be under pressure" said Joseph Tsang, Chairman at JLL in Hong Kong.  
According to the Land Registry, in 1Q22 residential sales fell to a two-year low of 10,056 deals, down 33.8% QoQ. Most developers had to suspend new launches, especially after January when the market lost steam following a clampdown on gatherings.