tirsdag 30. juli 2019

As protests rock Hong Kong, money may flee to safer and cheaper property markets

As Hong Kong’s political crisis enters a dangerous new phase, with the protests
erupting into violence, the city’s reputation among investors is taking a severe knock. The territory’s rule of law and fundamental freedoms – crucial advantages that have underpinned Hong Kong’s status as Asia’s premier financial centre – are being eroded, raising the spectre of an exodus of capital and businesses from the city.

In the property market, the unrest coincides with – and indeed is being partly fuelled by – a continued surge in house prices, which are hovering near record highs, cementing Hong Kong’s position as the world’s most overvalued residential real estate market and pushing the city further into the “bubble risk zone”, according to the Global Real Estate Bubble Index published by UBS last September.