Investor sentiment in Shenzhen's property market has generally been positive, according to a recent survey. Asia News Photo

Despite mounting concern over the state of the Chinese mainland economy, real-estate experts are more optimistic about the prospects for property investment in both Shenzhen and Hong Kong for next year, compared with 2015.

A report by the US-based Urban Land Institute and PricewaterhouseCoopers (PwC) published on Monday, ranks Shenzhen 18th among cities in the Asia-Pacific region regarding real-estate investment prospects for 2016, moving up one place from this year's 19th.

Hong Kong climbed three places - from 21th this year to 18th for 2016, according to the report "Emerging Trends in Real Estate Asia Pacific 2015".

"Due to the country's macroeconomic environment, international investors have expressed concern over the Chinese mainland's property market," said Sun Ying, a PwC China partner.

"But, despite the subdued outlook, they still don't want to leave the market and believe that investing in the country will reap benefits."

Investor sentiment in Shenzhen's homes market has generally been positive, says the report, which gathered the views of 343 professionals in the real-estate industry.

Office vacancies stood at only 5 percent at the beginning of this year. Although they are expected to rise with new supply, market absorption has been strong in the city, it says.

As for the residential sector, Shenzhen's market saw considerable price growth after the central government introduced a loan easing policy in late March. Average prices for new homes in the city surged 68.7 percent year-on-year to 44,761 yuan ($6,977.8) per square meter last month, according to Shenzhen's Centaline Property Research Center.

"We're optimistic about the prospects for real-estate investment in Shenzhen, at least over the next few years," said Zhang Qian, chief researcher of data research center at Shenzhen-based real-estate agency Qfang.com.

The active environment in Shenzhen's property market is mainly determined by the city's population and industry structure, she said.

"Compared with other first-tier cities like Guangzhou, a large proportion of Shenzhen's population comes from elsewhere. Shenzhen's population inflow and outflow are strong, making property transactions quite active," Zhang told China Daily.

For real-estate investment in Hong Kong, investors are more conservative. Although the prospects for top-grade offices in the SAR continue to be boosted by a steady stream of mainland financial companies setting up shop in the city, investors are concerned about the dwindling number of mainland tourists, which has affected the SAR's retail industry and led to a drop in street rents, the report notes.

As for Shanghai and Beijing, property investment prospects have gone down, with Shanghai dropping from 6th to 9th spot and Beijing from 10th to 14th, according to the report.

sally@chinadailyhk.com

(HK Edition 12/09/2015 page10)