Hong Kong’s property market has witnessed investment activity drop substantially in the first half of the year.

Real estate services firm Cushman & Wakefield attributed the trend to tightening government policies, which have effectively removed short-term investors and speculators from the market, while reigning in price growth across the wider property market.

The industrial and retail investment markets suffered a greater slowdown in activity with investment value dropping by 83 per cent and 66 per cent in the second quarter, respectively.

“Investors are still cash rich and willing to deploy their capital on the right opportunity; while many sellers are not eager to lower prices as the low interest rate environment persists and their holding power remains strong,” said Kent Fong, executive director, investment, Hong Kong.

Cushman & Wakefield expects transaction volume to remain low in the next six months.