Hong Kong investment volumes to increase by 5% in 2023

But don’t expect much growth just yet early in the year.

The market is expecting the Fed’s interest rate increases to reach their pinnacle in early 2023. Colliers expects funds will wait-and-see and slow their purchasing activities, leaving cash-rich local investors and family offices, who are looking for attractive assets, to become the major purchasing power in H1. 

“We believe distressed sales will remain popular in Q1 as they offer bottom-fishing opportunities for investors,” the analyst said.

Here’s more from Colliers:

Meanwhile, the long-awaited HK-China border reopening is finally coming into light, although currently with a daily inbound quota of 60,000 people. These factors should benefit investment market sentiment in 2023, particularly for the retail and hotel sectors. 

We expect retail premises will continue to be the treasure-hunting paradise for local investors, and high street shop capital value can increase by 8% YOY in 2023. While border reopening will benefit the hotel market in hope of higher RevPAR, demands from Mainland students will also increase, adding the possibilities of landlords converting hotels into student accommodations. 

On the currency side, if the strong run of Hong Kong dollar vs Renminbi comes to an end, Chinese buyers’ appetite for Hong Kong assets will increase. Investment volumes in 2023 is forecasted to increase by 5% YOY, but the market will remain slow in early 2023, before steadily picking up in H2, subject to the specifics of the border reopening.