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Restoring faith in Hong Kong property
Just about everyone you meet in Hong Kong seems to be an expert on the property market. They will tell you the price per square foot for apartments in smart areas and rundown districts, and argue about what’s a bargain and what’s a rip-off.
But all of them agree on one thing: buying real estate in the territory is a surefire way to make money in the long run.
So front page splashes on Thursday that property sales for August slumped to their lowest level in 18 months is a bit worrying, even enough to rattle the most zealous believers in bricks-and-mortar.
Residential transactions plunged nearly 28% compared to July and more than 37% year-on-year according to the Hong Kong’s Land Registry. The SCMP reported that leading developers such as Henderson Land are slashing prices or offering cheap mortgages. But investors are sitting on their hands, nervously watching stocks plunge on the Chinese mainland.
And here’s the irony.
Research by Reuters has revealed that the Chinese government has forked out at least $70 million buying Hong Kong properties during the past year as Beijing swells its presence after last summer’s mass democracy protests.
The shadowy Chinese Liaison Office has bought 62 apartments, filling them with new staff to keep tabs on any resurgence of “Occupy Central” civil disobedience in the territory. And there are no signs that the spending binge is about to end.
So while a faltering Chinese economy and a collapsing Shanghai stock market threatens faith in Hong Kong property, tougher Big Brother vigilance could send prices higher.
Photo: Hank Anderson