Property transactions in Hong Kong descended to the lowest level in 33 years in 2023 as sentiment among potential homebuyers was submerged under a deluge of poor economic news and high interest rates, although December’s sales figures showed some rebound.

A total of 58,035 properties changed hands in the city in 2023, a 2.7 per cent drop compared with 2022 and the lowest figure since 1991, according to Land Registry’s data released on Wednesday. The total value of transactions plunged 13.8 per cent year on year to a 10-year low of HK$477.9 billion, the government data showed..

Nevertheless, analysts expect the city’s transacted sales to rise this month amid a pause in rate hikes, anticipation of rate cuts later in 2024, and a basket of rescue measures issued by the local government.

In December, transacted property sales rose 6.6 per cent month on month to a three-month high of 3,764, while sales value jumped 29.8 per cent to HK$33.59 billion, the Land Registry said.

Centaline Property Agency, one of the city’s leading property agencies, attributed the results to the government’s easing of stamp duties and the US Federal Reserve’s rate-hike pause.

“The figures reflect a sluggish market for the year of 2023 as interest rates soared and the local economy slowed down,” Yeung Ming-yee, senior associate director at Centaline Property Research, said in a report on Tuesday.

Transactions in the new-home market rose 4.1 per cent to 10,681 in 2023, with value rising 14.9 per cent to HK$131 billion, compared with 2022, the agency said. However, the figures were the lowest in 10 years aside from 2022, which saw sales of 10,261 units valued at HK$114 billion.

Last month, 950 new homes worth HK$10 billion sold, a 67.5 per cent increase by volume and a 50.8 per cent jump by value when compared with November. Centaline cited registrations for the first phase of Yoho West in Tin Shui Wai as a reason for the surge.

In the secondary market, 2023 sales added up to 29,690 units worth about HK$251.2 billion, Centaline said, as volume dropped by 6.6 per cent year on year to the lowest level in 28 years and value fell by 10.9 per cent to a seven-year low.

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Sales of lived-in homes in December edged down 1 per cent to 1,840 units compared with November, with total value rising 4.3 per cent to HK$13.2 billion.

“The property market in Hong Kong is expected to witness steady growth, driven by multiple favourable factors that showed by the year’s end,” Derek Chan, head of research at Ricacorp Properties, said in a statement.

However, purchasing power may turn to lived-in homes in the short term because the latest new-home projects to launch have sold out and the next round has yet to come to market, Chan said. This may drive sales of second-hand homes above 2,000 units in January, he added.

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Overall property transactions in January might rise 3 per cent to 3,880 units, Chan said.