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Property investors turn to SE Asia amid Hong Kong unrest
KUALA LUMPUR, Oct 13, 2019 (BSS/AFP) – From luxury Singapore apartments to
Malaysian seafront condos, Hong Kong investors are shifting cash into
Southeast Asian property, demoralised by increasingly violent protests as
well as the China-US trade war.
Millions have taken to the streets during four months of pro-democracy
demonstrations in the southern Chinese city, hammering tourism while also
forcing businesses to lay off staff — and the property sector is feeling the
pain.
Property stocks in one of the world’s most expensive housing markets have
plummeted since June, with developers being forced to offer discounts on new
projects and cutting office rents.
Hong Kong businessman Peter Ng bought a condominium on the Malaysian
island of Penang — which has a substantial ethnic Chinese population and is
popular among Hong Kongers — after the protests erupted.
“The instability was a catalyst for me,” the 48-year-old stock market and
property investor told AFP, adding he was worried about long-term damage to
the Hong Kong economy if the unrest persists.
“Investors will always look at things like that, political stability.”
And Derek Lee, a Hong Kong businessman who owns a Penang apartment, said
he knew others in the semi-autonomous city who were considering investing in
Southeast Asian property because of the unrest.
“People are thinking about how to quicken their ideas, how to make a more
stable life,” the 55-year-old told AFP.
Adding to the allure of Malaysia is its relative affordability and prices
much lower than Hong Kong.
The Malaysia site of Southeast Asian real estate platform Property Guru
has seen a 35 percent increase in visits from Hong Kong, according to its CEO
Hari Krishnan.
MORE/HR/0945
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– China-fuelled boom –
While Hong Kong’s protests are primarily pushing for greater democratic
freedoms and police accountability, the summer of rage has been fuelled by
years of simmering anger towards Beijing and the local government over
falling living standards and the high costs of living.
Hong Kong’s property market is one of least affordable in the world with
sky-high prices fuelled, in part, by wealthy mainlanders snapping up
investments in a city which has failed for years to build enough flats to
meet demand.
But now mainland Chinese, who traditionally viewed property in Hong Kong
as a safe investment, are opting for rival financial hub Singapore as a
result of the protests and the US-China trade war, according to observers.
There has been a jump this year in sales of luxury apartments in the city-
state — which like Hong Kong is known for pricey property — driven
partially by mainland Chinese buyers, according to the consultancy OrangeTee
& Tie.
“The protests in Hong Kong have made some of the (mainland Chinese) based
there… (more concerned) about investing in Hong Kong real estate, so they
carry that investment to Singapore,” said Alan Cheong, executive director of
the research and consultancy team at Savills.
As well as hitting China’s economy, trade tensions may have discouraged
some Chinese from investing in the West and pushed them towards Singapore,
with its mostly ethnic Chinese population.
“I think they don’t want to go to the West,” said Cheong.
Singapore is “the closest country culturally to China other than Hong
Kong, and I think they feel more comfortable with that”.
There are further signs the stable, tightly ruled city is benefiting from
the Hong Kong turmoil — Goldman Sachs last week estimated as much as $4
billion flowed out of Hong Kong to Singapore this summer.
And analysts warned there was little hope of Hong Kong’s property market
recovering soon.
“Hong Kong property share prices have corrected by about 15 to 25 percent
since July,” said Raymond Cheng, head of Hong Kong and China property at CGS-
CIMB Securities International.
Residential sales were still holding up but only when developers offered
discounts, office rents were expected to fall by as much as five percent and
shop rents were also badly affected, he said.
But despite the unrest, businessman Ng — who will rent his Penang
property and has no plans to move there permanently for now — was still
hopeful about Hong Kong’s long-term prospects.
“The problem may not be solved in the short term but it is not so serious
as pessimists think,” he said.
“Everything is still in the government’s control.”
BSS/AFP/HR/0950