Hong Kong saw its largest ever investment volume of standing real estate assets in 2017, and it was ranked first among all cities in APAC and seventh globally on this measure. The transaction volume of its development sites also hit a new high with over US$ 21.3 billion in sales. It also has the distinction of being the world’s most expensive market on a price per area basis, and its property exhibits among the world’s lowest yields. Certainly it is among the world’s most crowded places with around 6,350 inhabitants per square kilometer. Its 7.4 million residents also welcomed over 58.4 million tourists/visitors last year who added to this density and demand. Thus the supply-constrained commercial and residential real estate stock of Hong Kong is under constant pressure to rebuild, retrofit and redevelop on land which is often rezoned, remediated or reclaimed. GDP per capita in Hong Kong is over US$ 61,000 and is surpassed only by nine countries in the world, seven of which have smaller populations. Enjoying a recently announced HK$ 46.6 billion (US$ 5.9 billion) budget surplus, in large part thanks to land sales and the real estate stamp duty, this wealthy city has nonetheless slumped to 71st globally in Mercer’s annual quality of life survey. Balancing growth and enhancing quality of life while increasing interest rates to maintain its currency peg with the U.S. will likely be the greatest policy challenges in the next few years.
Source : CBRE Global Investors