Lai Fang: Hong Kong residential prices and transaction volume have shown a moderate recovery since October, and the leasing market is also stable and trending upward.

The latest "Hong Kong Monthly Property Market Report" released by Lefang shows that the Rating and Valuation Department's report indicates a 1.1% year-on-year increase in Hong Kong's private residential prices in October, with a 1.8% increase since the beginning of the year, indicating a moderate recovery in residential prices and transaction volume. The report highlights the focus on the new Spring Garden development in Wan Chai, with a sales rate of 97%, attracting investments from mainland Chinese and overseas buyers. Demand for 1 to 2-bedroom units in the leasing market remains strong, especially from mainland Chinese professionals. Rental activity is mainly concentrated on rents below HK$60,000, with an increase in rentals of HK$200,000 to HK$400,000 per month, mostly from mainland Chinese tenants. Additionally, there is a recovery in leasing demand from expatriates and companies in the finance sector. In the Grade A office market, the report mentions that high-quality Grade A offices on Hong Kong Island are showing strong resilience, with a faster recovery rate than traditional office buildings. In contrast, traditional standard office buildings are under pressure due to oversupply and tenant preferences for quality over quantity. The demand for small office spaces and shared offices is increasing due to the demand from mainland Chinese companies and start-ups for IPOs. As for Grade A premises in Kowloon, there has been an increase in transactions in November, mainly driven by small and medium-sized enterprises relocating to units below 3,000 square feet, with transactions mostly below HK$20 per square foot. Owners of strata-titled buildings are considering vacating tenants to capitalize on the investment recovery opportunity. Large enterprises occupying over 20,000 square feet tend to renew leases to avoid high capital expenditures. With the slowdown in the market, it indicates that Kowloon may be entering a bottoming phase. In the retail property market, the report states that Hong Kong's retail sales totaled HK$276.5 billion from January to September, with a narrowing decline of 1%. Retail sales have been steadily recovering since the end of April after 14 consecutive months of negative growth, with a 6.2% increase in luxury goods sales from May to September. Meanwhile, leasing activity in core retail areas is active, and new retailers are actively entering the market.