Hong Kong’s property recovery could be more robust than many think

A wave of bullishness is sweeping through Hong Kong’s real estate market. A report by S&P Global Ratings on May 5 said an “upside surprise” could materialise. One of the catalysts for a stronger-than-expected recovery was evidence of more competitive bids at residential land auctions in recent months.S&P said, “Hong Kong has become the first major city in China whose property market has bottomed. That could attract developers from China" class="entity-link entity-location" data-entity-id="12537" data-entity-type="location">Mainland China looking to secure new projects”. More aggressive bidding could test the financial discipline of developers as “replenishing land will be crucial for developers to fortify their market position and support long-term growth after a period of muted acquisitions”.In addition, S&P pointed to the strong role of investors at recent project launches. The removal of property cooling measures and higher rental yields than in China’s first-tier cities have made Hong Kong property attractive to mainland buyers.