According to the latest issue of RLB Construction Cost Update HK Report, it is projected that the tender price index will rise moderately in the coming quarters.
Hong Kong’s economy demonstrated ongoing signs of recovery during the fourth quarter of 2023, primarily driven by inbound tourism and private consumption. The government’s efforts to promote mega events are anticipated to further stimulate visitor arrivals. Concurrently, the construction industry also experienced growth, with a 4.9% increase in building and construction expenditure. Considering the low baseline for comparison, the private sector saw a year-on-year rise of 10.2%.
In line with the 2024-25 Budget speech, the government unveiled the 2024-25 Land Sale Programme, comprising two commercial sites, one industrial site and eight residential sites. It is projected to yield approximately 15,000 housing units, surpassing the annual demand estimated in the Long-Term Housing Strategy. In long run, the government has established plans to enhance infrastructure connectivity within the Greater Bay Area through collaboration with Shenzhen authorities on cross-boundary railway projects. The Northern Metropolis and the associated infrastructure projects will continue to provide boost to the construction industry, especially for the public sector. In light of the global economic climate, the time-lagged effects of stringent monetary measures also had an impact on the overall global economy. However, it is expected that major central banks will reduce interest rates, leading to a gradual recovery in demand. Moving forward, the economic outlook for Hong Kong appears favorable, with anticipated improvements in the external environment. The government’s emphasis on infrastructure investments and strategic resource allocation for capital works is expected to result in a moderate rise in the tender price index in the upcoming quarters.
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