PHOTO AFP Global real estate services firm Cushman Wakefield cut its full-year forecast for new-home sales growth in the Guangdong-Hong Kong-Macao region to 7 to 15 percent, down from 20 to 25 percent previously.
The firm said its total home transactions in the city cluster would be as much as 460,000 units in 2023, up to 500,000 compared to the same period last year.
The downgrade came after the bonanza of home buying that followed the border reopening withers away, despite an overall increase in the transaction volume in the first half of the year.
The Bay Area's primary residential market recorded a rise 16.1 percent in the first six months of the year compared to the same period last year.
Cushman Wakefield said the rise was mainly seen in the first quarter and it is in the context of the relatively low base of 2022 under pandemic restrictions, along with a rise in new residential projects launched. Last year, purchasers bought 400,000 new homes in the multicity metropolis, a 35 percent drop compared to 2021.
Since April, residential transactions have again slowed, with transaction numbers in June falling by more than 40 percent compared to March s peak, indicating a lack of upward momentum.
At the beginning of the border reopening period in the first quarter of 2023, residential transactions in the GBA recovered, and the transaction peak season during March and April was also more active compared to last year, said Alva To, Cushman's vice-president and head of consultancy for Greater China.
The boost from the border reopened could not be sustained, and the previous pent-up demand has yet to support the market sufficiently to rebound further, To said that the performance in the second half will hinge on overall economic development.
Home prices in the greater Bay Area are experiencing a drop in demand. In the second quarter, He cites Shenzhen's high-end secondary home prices, which fell by 8.9 percent from its previous peak in the same period in 2021.
Under the government's direction that Houses are for living in, not for speculation, any further policy changes for the residential market will likely be conservative. In the second half of 2023, we expect home prices to further decline by another 5 percent, he said.
The bearish sentiment is seen on the commercial front. In the first half of 2016 the value of investment in the Greater Bay Area dropped 10.5 percent year-on-year to 28.2 billion yuan in the fallout from a slow global economic recovery and elevated borrowing costs.
The transaction value was a positive note, accounting for 31.5 percent of the nation's commercial real estate market, the highest since 2018.
Hong Kong, Macao, and nine mainland cities in Guangdong province are part of the Greater Bay Area, which encompasses the Pearl River Delta. With a population of more than 86 million, its economic output topped 13 trillion yuan last year - 2.8 trillion yuan more than in 2017 - according to data from Guangdong's Development and Reform Commission.