The Proposed Extradition Bill by the Hong Kong Government has sparked recent and ongoing protests throughout the territory which has shaken the local and international community.
Much of what happened has been covered by media. Our article aims to specifically address how these events may impact the Hong Kong Property Market in the Short to Long Term specifically in terms of Prices, Supply, and Market Sentiment.
External Market Volatility
In addition to the recent events, Business sentiment across the Hong Kong markets remained cautious as uncertainties around the US-China trade war persists. This, in turn, has a trickle effect on the Property Market. The demand for luxury housing decreased as people adopt a wait and see attitude.
Confidence in Hong Kong
The proposed new law and its widely perceived potential to undermine Hong Kong’s judicial and political independence may lead people to question long term investments involving hard assets in the city as confidence is questioned. This will reduce overall demand.
Parking Wealth Overseas
The general loss in Confidence and the unknown factors such as whether there is a risk that assets may be seized or flow of money in and out of Hong Kong may be restricted may lead
ultra high net-worth individuals to look elsewhere to park their wealth, with Singapore, the city’s main financial rival, a popular choice.
Our Views on the Hong Kong Property Market is the Long Term remains Positive. Many of the points discussed are sentiment based such as the movement of assets and cash but as seen after the 1997 crash when many people were investing overseas, the money came flooding back to Hong Kong as fast as it left. Hong Kong’s strategic location on the southern tip of potentially the next superpower and within 5 hours of major tiger economies and the pacific rim has in the past and will continue to give Hong Kong an edge over cities further north or who are landlocked.
Shenzhen is poised to become Asia’s major tech hub with Hong Kong and Mainland developers purchasing land plots for residential development at record-breaking prices. See article This development will, in turn, benefit Hong Kong in the long term through the expansion of business in the region.
However much of Hong Kong’s future prosperity lies in the future generation and ability to boost confidence in the Local and Mainland Government to protect the rights and freedoms they have enjoyed. If able to integrate Hong Kong into China and offer our special “niche” we feel confident that the future for Hong Kong remains a bright one.
Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of any government, agency or persons nor should it be construed as providing any investment advice.