HONG KONG : Hong Kong said on Friday it would not offer any commercial land for sale again in the quarter from October to December, the seventh in a row, as low demand keeps office vacancy rates high.
Development Secretary Bernadette Linn added that the government could miss its target of supplying land to build 13,200 flats in the current financial year ending in March, as it plans to sell just one small residential site this quarter.
“We all know the demand in the property market is not good; even after the interest rate cut … the economy seems to be improving, but it will take time for the property market to position its strategy,” Linn told reporters.
“When the total private housing land supply in the first three quarters supports the development of about 50 per cent of the full-year target … it’s a prudent and pragmatic practice.”
Hong Kong’s private home prices dropped in August for the fourth consecutive month, the latest official data showed, as potential buyers kept to the sidelines ahead of interest rate cuts.
Hong Kong’s banks surprised the market in September with a cut of 25 basis points in their best lending rate, after the U.S. Federal Reserve cut its rate.
Home prices in one of the world’s most expensive property markets have tumbled 26.6 per cent from their 2021 peak, staying at their lowest level since September 2016, hurt by higher mortgage rates, an outflow of talent and a weak market outlook.
The office sector faces unprecedented challenges, real estate consultancy Savills said in a report on Friday, battling record-high vacancies and a 40 per cent decline in rents since 2019. It expected the vacancy rate to rise to 17 per cent by 2027 from 14.8 per cent now.
