The anti-government protests are gaining momentum and with it the economy of Hong Kong continues to see steep changes. The real estate market, in particular, has seen a tremendous fall since June 2019. Given the current political situation, it will likely worsen in 2020.
In the past few months, over 16,000 rounds of tear gas have been fired by the police to restrain the anti-China protestors. Several vehicles, shops and homes have been vandalised. Hong Kong even cancelled its popular New Year’s Eve fireworks event this year.
It is therefore not surprising that the local population of Hong Kong is hesitant to invest in property as issues of future security continue to grow uncertain. Civilians are, on a regular basis, encountering hazards to life as protestors and police continue to show no signs of coming to an amicable resolution and are often resorting instead to violent measures.
Residents are worried and they are now looking at real estate outside the country in hope of leading safer lives. As the political scenario in Hong Kong worsens, property pricings are no longer the most important deciding factor for most potential overseas investors. The concern is now mainly centred on the safety of children, elderly and other family members. Some locals are hence even making steep investments in countries like Australia and Canada to escape the tense environment of Hong Kong.
Property across the globe has reportedly caught the interest of local residents. Investors, who are able to meet the financial and immigration requirements, are looking into the potential of markets in the United States, Canada, Singapore, Japan and Australia among other places for a locational shift.
The CBRE network between Hongkong and cities like Sydney, Brisbane, Melbourne as well as the Gold Coast has already launched flats under its “Penthouse Collection” to target high-end buyers. These properties are valued to start at around A$20 million (US$13.8 million). Several are priced over A$30 million. The flats on sale offer luxury amenities like wine cellars, valet and concierge services, private lifts, and even rooftop pools.
The middle-class community are more limited in their choices for an international safe space. But this is not stopping them from enquiring into the property market of Australia and Canada. While sales are yet to register a significant increase, the overseas market has noticed a marked rise in enquiries for residential units priced under A$2 million. In Canada, the enquiries are aimed at property priced at around C$1 million (US$760 million).
Though most available apartments at this price range lie outside the city, the enquiries are persistent as most potential buyers are looking into the property for self-dwelling rather than investment purposes. As such their enquiries are not just limited to value and future profit margins. Interested buyers are now centring their choices on questions like amenities available around the apartments like quality and scope of schooling, healthcare services, livelihood options and so on. Locals are also eyeing houses in neighbouring Asian countries like Malaysia and Taiwan.
Most of the enquiries are made by persons with young families. They are using all possible means like conferences with accountants, immigration consultants, overseas education consultants, and mortgage brokers, to get an overall understanding of the investment before taking final steps of shifting base.
The lack of buyers is, meanwhile, making property prices in Hong Kong fall considerably. Despite the slashing prices, investors are reluctant to consider the domestic market as of now. 2020, for the moment, does not show any signs of this trend changing.
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