HONG KONG – In a remarkable turnaround for the residential property sector, private domestic property completions in Hong Kong skyrocketed in 2024, recording a staggering 75% increase compared to 2023. This notable rise comes in the face of a 10% boost in take-up rates, indicating growing demand despite a year-end vacancy rate of 4.5%, as reported by the government.

The Rating and Valuation Department's recent annual review revealed that the completion of private residential units – which excludes various government housing schemes – reached an impressive total of 24,260 units last year. This surge marks a significant recovery in the market, emphasizing the resilience of Hong Kong's real estate industry.

In 2024, the net increase in occupied units, known as take-up, amounted to 17,310 units. This increase reflects a thriving housing market where demand is climbing back after a period of slowdown.

Interestingly, the New Territories led the charge with the highest completion rate at 48%, closely followed by Kowloon at 45%, while Hong Kong Island accounted for a mere 7%. Notably, Kowloon City emerged as the top supplier of new units, with neighborhoods like Yuen Long and Tuen Mun also contributing significantly, collectively responsible for 66% of all new completions.

By the end of 2024, the total number of vacant units stood at approximately 57,900. Out of these, around 14,260 units were still waiting for a Certificate of Compliance or Consent to Assign, highlighting potential delays in moving these properties into the active market.

Looking ahead, the Rating and Valuation Department forecasts continued growth in the property market, estimating that 20,860 private domestic units will be completed in 2025, and another 20,100 units in 2026. Kowloon is expected to dominate the market in 2025 with 46% of the completions, while the New Territories will once again lead in 2026, projecting 69% of the total new units.

Despite a brief spike in domestic sales due to the lifting of demand-side management measures in early 2024, price adjustments were observed later in the year. The market stabilized in the fourth quarter, aided by several interest rate cuts and modifications to loan parameters. This has led to a rental market that has outperformed the sales market, driven largely by an influx of talent facilitated by various government admission schemes. By December 2024, rents had seen a year-on-year increase of 3.3%.

In a related sector, private office space completions saw a slight decrease to 147,000 square meters in 2024, with the vast majority being premium Grade A offices. In contrast, commercial premises completions dipped to 69,000 square meters, indicating possible challenges in the commercial property market.

As Hong Kong positions itself for continued recovery and growth, industry watchers and potential buyers alike will be keenly observing how these trends develop throughout 2025 and beyond. What does this mean for future buyers and renters? Only time will tell! Stay tuned for more updates on this evolving market.