Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Hong Kong's sky-high property prices prove resilient in face of protests

Stock MarketsSep 29, 2019 02:24AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. FILE PHOTO: Anti-extradition bill protesters march at Tseung Kwan O residential district in Hong Kong

By Clare Jim and Felix Tam

HONG KONG (Reuters) - While months of Hong Kong protests have scared away tourists, sent jitters across the financial center and cast a dark cloud over the local economy, there's one thing residents of the city are confident they can bank on - sky-high property prices.

Home prices in the former British colony have rocketed over 200% in the past decade, driven by limited housing supply and large capital flows from mainland Chinese buyers, angering many residents who can't afford to get on the property ladder.

And despite the worst protests since Hong Kong reverted to China rule, property prices have hardly budged.

Lily Chow, a 32-year-old clerk, is among the lucky ones. She and her husband recently snapped up a two-bedroom apartment off the plans for HK$7.5 million ($957,000) in the New Territories.

"I am not confident in the government, outlook or economy. I am only confident that Hong Kong property prices will not drop," Chow told Reuters in the sales office of the development.

Property firm Wheelock (HK:0020) has sold 80% of the 816 flats in its projects since late August, lower than sales at other launches this year, but "still good" given the current environment, property agents said.

As Hong Kong gears up for yet another anti-government protest on Oct. 1 - the 70th anniversary of the founding of the People's Republic of China - there was scant sign the prospect of further violence had dampened homebuyer demand.

Hundreds of prospective buyers queued on Thursday in a sales office in the gleaming International Commerce Centre (ICC) skyscraper for a development near Mong Kok district, the site of some of the most violent protests in recent months.

"The political environment is shakeable, but I am pretty sure the property market is unshakeable," said office assistant Candy Lau, 32, as she queued for an HK$8 million, 273 sq ft, one-room apartment in the development by Sun Hung Kai Properties (HK:0016), Hong Kong's largest developer by market value.

A week earlier, Sun Hung Kai launched its first batch of 352 flats in the same development in Kowloon district, selling all but one to underscore the strong demand.


A traditional belief in bricks and mortar investment and a history of strong returns from property has helped Hong Kong home buyers keep the faith.

Official data showed Hong Kong property prices rose close to 10% in the first seven months of the year, including a tiny 0.1% decline in July after the mass protests intensified in mid-June.

One reason for the smaller-than-expected drop was low transaction volumes during July, caused by a mismatch of price expectations between sellers and buyers.

But with signs last month that sellers were more willing to reduce their initial asking prices, volumes have stabilized, according to realtors.

"There's still much real demand, and when sellers became more willing to cut prices by 10-20%, some buyers chose to enter the market," said Derek Chan, realtor Ricacorp's head of research. He estimates a 5% rise in prices for the full year, down from an earlier forecast of 10%.

August house price data is due on Monday and agents are expecting a bigger fall than July.

Two other buyers told Reuters they expect home prices will climb in the long run, despite any short-term softness, because a fundamental supply shortage simply won't go away.

Every day, Hong Kong grants 150 residential permits to mainland Chinese, according to the government, adding to a population of 7.4 million crammed into just 1,100 sq km (425 square miles), of which 40 percent is country parks or nature reserves.

Tiny living spaces have become increasingly common in the world's most expensive property market where some of the city's poorest people live in cage homes - wire mesh hutches stacked on top of each other.

Long-standing frustrations over unaffordable housing have spilled onto the streets during recent protests, which started over a now-suspended extradition bill and have evolved into calls for greater democracy, among other demands.

"7K for a house like a cell and you really think we out here scared of jail," reads graffiti scrawled near one protest site. HK$7,000 ($893) is what the monthly rent for a tiny room in a shared apartment could cost in Hong Kong, which reverted from British to Chinese rule in 1997.

Making housing more affordable has been among every post-colonial Hong Kong leaders' top priorities, but each administration has been unable to rein in skyrocketing prices that have fueled discontent in the city.


Sun Hung Kai Properties deputy managing director Victor Lui told an earnings conference this month that even though the company's schedule for new launches was slightly delayed due to the protests, the company planned to keep pushing out new home sales in coming months.

He expects property prices to be flat for the full year.

Agents said the most sought-after properties are small to medium-sized apartments below 600 square feet, while the luxury segment continues to slow due to a drop-off in Chinese buyers and caution over the U.S.-China trade war.

Citi Hong Kong's latest survey showed interest in property ownership in the third quarter - 20% of respondents - was little changed from the preceding quarter, even though more respondents expected prices to fall than rise in the next 12 months.

Taking a "wait and see" approach, around 5% of would-be buyers were now opting to rent, agents said, sending average rents in August 4.5% higher than January.

Thanks to tighter debt servicing requirements in recent years, most home owners are expected to be able to continue meeting repayments even in the case of a big correction, avoiding systematic pressure, analysts say.

While JP Morgan predicts a 30% slide in prices in a worst-case scenario, many people remain confident in the market.

"The protests are only a small incident happening in Hong Kong," said Josephine Tsang, a 57-year-old retired teacher, who recently bought an apartment for her 28-year old son. "If I don't buy now, the price will keep rising."

Hong Kong's sky-high property prices prove resilient in face of protests

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email