Economic growth in Hong Kong has beaten expectations so far in 2016. Real YOY GDP growth was 0.8% in Q1 2016, 1.7% in Q2 and 1.9% in Q3. This improvement has been driven by strength in domestic demand, with consumer spending, investment and imports all picking up, and business confidence rising correspondingly. While the high value service sector’s expansion continues, other sectors have re-emerged with better growth towards the end of the year.
Looking into 2017, economic prospects for Hong Kong are brightening. However, the various property market segments will fare differently. Colliers expects the office sector to continue to outperform but the residential and retail sectors to stay under pressure, while the industrial sector should recover from its recent decline. The key risk is an early return to positive real interest rates.