Hong Kong’s real estate market has been facing issues with escalating rates and a decrease in sales for the past several years. The housing market downturn in Hong Kong can be attributed to several factors, including China’s economic state, interest- rate increase throughout the country, and a rise in tension and financial conflict between China and the US. City officials have reported that Hong Kong is currently in a state of “correction,” referring to efforts and discussions in place to change the current economic state and the current downfall in the Hong Kong real estate market.
Hong Kong has seen a recent drop in home prices of around 3%, economic signs show that prices will continue to drop in the coming years. The housing market decline can be attributed to many factors. Mortgage applications have drastically dropped in the past year. There was a 56% decline in mortgage applications, the largest decline seen by Hong Kong in the past 20 years. The readjustment and increase of mortgage rates attributed to the massive drop.
People are losing interest in purchasing homes in Hong Kong because of the escalating prices. The lack of mortgage applicants is shown highly within the luxury leasing industry. Many wealthy buyers have walked away from deals because of extreme interest rates and very high costs. Many wealthy investors have held out on finalizing deals and have opted to wait until changes in the market are evident. Investors believe that when tensions with the US and Chinese trades ease, prices will be more affordable.
Market trends have caused a plummet in sales and transactions. By the end of this past year, Hong Kong was at its lowest level of new home transactions in over 16 months, and housing prices are projected to fall over 25% by the next year.
Hong Kong is usually known as one of the most expensive real-estate markets in the world. Inflation of borrowing costs and interest rates have deterred buyers from the market. Investors have expressed concerns over overvalued property and inflated appraisals. Wealthy buyers recognize the gap between the Chinese yuan and the U.S dollar and are fully aware of the tensions between the United States and China, as the U.S Federal Reserve continues to raise its interest rates.
Hong Kong construction industry overview
Despite the decline in the Hong Kong real-estate industry, the building and construction market continues to thrive in Hong Kong. Hong Kong companies stand to have a highly coveted reputation in the construction industry. They are known for their speedy project completion times, and their unique techniques. Hong Kong’s excellence in construction has crowned them as a leader in the Asian construction industry. Hong Kong’s construction industry is made up of local contractors, international and oversea contractors, and subcontracting entities. Hong Kong specializes in smaller companies who work closely with their clients to guarantee successful high-class service. Hong Kong construction workers and architects are known for their experience, skills, and excellent client services.
The Hong Kong architecture industry is a world leader in high-rise building designs and commercial properties. They are known for their innovative and futuristic designs. Architects partner with engineers to export services throughout the Chinese region. Construction workers, architects, and engineers combine services with project managers, urban planners, and surveyors to provide optimal service throughout Hong Kong and the Chinese region.
Architects who practice in Hong Kong are required to register with the Hong Kong Institute of Architects (HKIA), an institution that prides itself on providing quality service throughout the construction industry in Hong Kong. Similarly, engineers who practice in Hong Kong are mostly members of the Hong Kong Institution of Engineers (HKIE), a local group of engineers, established as a government ordinance in 1975. Both the HKIE and the HKIA work together to maintain the integrity of the Hong Kong construction industry.
Hong Kong continues to thrive in the construction realm and great things are on the horizon for construction and buildings in Hong Kong.
Urban planning in Hong Kong
The success of the construction industry is greatly attributed to the work of urban planners in Hong Kong. China and many developing Asian countries have turned to Urban planning to address the need for infrastructure development, road and traffic issues, housing and port facilities, and overall city planning. The increase of tourism and rapid population growth brings a high demand for new construction projects.
Urban planners in Hong Kong and throughout Asia are challenged with issues with environmental protection. Qualified surveyors and reliable surveying countries are in high demand when developing new project plans. Environmental surveyors are needed to plan for green buildings and environmentally friendly projects. Hong Kong city officials and urban planners have worked with the Urban Renewal Authority to devise an environmentally sustainable policy for upcoming urban renewal projects. China has set goals to establish 50% of all new buildings constructed to be green and environmentally friendly.
Urban planners in Hong Kong face challenges with growth and changes in technology. Planners and surveyors strive to find affordable and realistic ways to incorporate new technology growth in construction and urban planning projects. Hong Kong planners and surveyors aim to think of innovative ways to incorporate information technology and building information modeling as a way to increase property value and demand.
Because of the high demand for technology and green-friendly initiatives, Surveyors practicing in Hong Kong have increased and opportunities for surveying companies continue to grow. Many international surveying companies have created a base in Hong Kong. Hong Kong is most well known for successful quantity surveying and building surveying.
Hotel and short term stay industry growth and regulation
As with many places in Asia, Hong Kong has experienced steady growth in short term stays and short term housing. The Hong Kong hotel industry continues to dispute alternative housing options like Airbnb, while residents of Hong Kong have turned to short term property leasing as a way to gain income during troubling economic times. Technically, Hong Kong has deemed rentals under 28 days as illegal in the country, but consumers and residences continue to advocate for the need for short term rentals in the Hong Kong area.