News release

Border reopening to lend limited support to residential market

Most buyers to hold wait-and-see approach until economy picks up

March 08, 2023

Yvonne Liu

Public Relations Director, Hong Kong and Macao
+852 2846 5264

HONG KONG, March 8, 2023 – In early February, travel between Hong Kong and mainland China finally resumed normalcy after three years. Although the border reopening is expected to improve economic growth prospects, which in turn should facilitate a recovery in residential market sentiment, the actual rise in market transactions may be more gradual, according to JLL's latest Residential Market Monitor released today.

Although home prices have regained ground since the beginning of the year, especially in popular developments, transactions continued to hover at low levels. In January, 3,051 residential transactions were recorded, 18.7% lower than the previous year's monthly average of 3,755. Also, purchasing activities by non-local buyers were tepid. Only 34 transactions involving Buyer's Stamp Duty were recorded in January, compared to a monthly average of 53 in 2022.

Norry Lee, Senior Director of Projects Strategy and Consultancy Department at JLL in Hong Kong, said: "In the FY2023-24 Budget Speech, the Government widened the value band for lower rates to reduce the ad valorem stamp duty that first-time buyers pay. While we believe this adjustment is a step in the right direction, the change is so minute that it will have near zero impact on the overall market. In addition, with the mortgage rates likely to rise further and stay elevated, the small saving will be easily eroded by higher interest expenses. As such, the positive market sentiment after the announcement is likely to be short-lived."

Nelson Wong, Executive Director of Research at JLL in Hong Kong, said: "The rising home prices since entering 2023 may not last. It is worth noting that after a hiatus of transactions for nearly six months, some buying power has been accumulated. The reopening of the economy at the turn of the year was a timely event to help release such pent-up demand to the market. However, once the demand is digested, turnover will likely return to a low level."

Number of units Jan 23 Dec 22 2022 monthly average
(Jan 23 vs. 2022 average)
Primary residential transaction 363 247 860 (-58%)
Secondary residential transaction 2,688 2,260 2,895 (-7%)
Transaction involving Buyer's Stamp Duty 34 35 53 (-36%)

Source: JLL Research

The bottom line is that the median income growth in 2022 was significantly less than the rise in mortgage interest liability. The estimated monthly mortgage payment for a HKD 5 million mortgage surged by around HKD 5,500 last year, while the median monthly household income increased by merely HKD 800. Wong added: "We expect buyers to remain lukewarm and will hold a wait-and-see attitude until a visible pick-up in the economy, and investors will continue to be sidelined until punitive stamp duties are removed." 

About JLL

JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. JLL shapes the future of real estate for a better world by using the most advanced technology to create rewarding opportunities, amazing spaces and sustainable real estate solutions for our clients, our people and our communities. JLL is a Fortune 500 company with annual revenue of $20.9 billion, operations in over 80 countries and a global workforce of more than 103,000 as of December 31, 2022. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit