The retail market specifically will reap the “greatest profit,” Hannah Jeong, Colliers’ head of valuation and advisory providers, advised CNBC’s “Squawk Field Asia” on Thursday.
Nonetheless, there are nonetheless some potential headwinds this 12 months which will undercut Hong Kong’s restoration, Colliers stated in its newest report. These embody continued geopolitical stress and a potential world recession.
“We’re a extra cautiously optimistic view for 2023,” Jeong added.
“There can be completely different uncertainties from exterior elements however borders opening is definitely the one of many booster[s] for a lot of different sectors inside the property market.”
In accordance with Colliers, the retail sector — particularly the excessive avenue store phase — would be the “first runner” within the post-Covid restoration in 2023 with each rents and costs.
“We’re about an 8% improve year-on-year, when it comes to the retail rental efficiency,” Jeong added.
She stated, nevertheless, that is nonetheless about 25% to 30% decrease than pre-Covid ranges.
Collier added in its report that regardless of China’s reopening, native consumption will stay “an vital driver” for Hong Kong’s retail market within the subsequent 12 months.
“The shifted purchasing sample of the Mainlanders during the last three years could paint a brand new image to the brand new retail market sentiment,” it added.
Within the workplace sector, Grade A workplace rents will bounce again by 3% this 12 months, stated Colliers — because of “pent-up demand from Chinese language and abroad corporations.”
Even so, Jeong stated that Hong Kong’s workplace market nonetheless has a excessive emptiness charge, at 14.7%.
“Nevertheless it’s not it is not the tip of the world as a result of … in contrast with different peer cities, 8% to 10% is a typically affordable quantity,” she added.
Hong Kong’s house costs plunged to a five-year low in October as rates of interest hikes pushed up borrowing prices.
This resulted in a “softening of funding demand,” stated Jeong, however the demand from homebuyers nonetheless exists.
“Homebuyers … [have been] using this time when market is softening, they’ll snatch the cheaper flats,” she added.
“However in 2023, I feel the rate of interest … will proceed to go up. We’re stabilization at the least within the second half of this 12 months.”
Simply final month, Hong Kong raised rates of interest by 50 foundation factors to 4.75%, following the U.S. Federal Reserve.
Excessive prices of borrowing will dampen residential market demand and a “destructive 5% to 10% downward adjustment” ought to therefore be anticipated this 12 months, Jeong stated.