Protests fail to dampen HK's love of property

Hong Kong

EVEN some of the biggest protests in Hong Kong's history failed to dampen the city's love of property.

While an estimated two million people - more than a quarter of the population - took to the streets Sunday to protest a controversial extradition bill, many others spent the past weekend going house-hunting.

New condominium developments launched on the weekend by Sun Hung Kai Properties and New World Development were oversubscribed by six and three times respectively.

"The market has rigid demand for apartments, especially middle- and small-sized ones," New World said in a statement on Sunday.

Property prices recently reached a record after a rapid rebound from a sharp drop late last year.

Secondary transactions in 10 large housing estates tracked by Centaline Property Agency remained stable over the weekend.

While the city was overwhelmed by an unprecedented protester turnout on Sunday following a week of demonstrations that saw police fire tear gas and rubber bullets, market watchers are confident about the outlook for the property market.

The protests will have little impact on housing prices at this stage, according to Simon Smith, head of research and consultancy at Savills. "Property values remain well supported. I don't see any catalyst for a sell-off," he said, adding that ample liquidity and shortages of new stock are supporting home values.

Real estate analysts Patrick Wong and Michael Tam noted that prolonged protests in Hong Kong are unlikely to prompt a collapse of the city's home prices, as "some potential buyers should regain confidence after the government suspended the extradition bill".

"Transaction volume may remain relatively low in the short term, until investors see more clarity relating to the US-China trade war," they said.

When Hong Kong experienced the large-scale pro-democracy demonstrations in 2014 known as the "Umbrella Movement", the real estate industry was largely immune to the ructions.

Home prices climbed 4 per cent during the nearly three months of street occupation by protesters demanding universal suffrage in Hong Kong. The Hang Seng Properties Index gained around 2 per cent in the period.

"Some clients are adopting a wait-and-see attitude, but won't for too long because they have the demand," said John Fong, a sales director at Midland Realty.

Hong Kong Chief Executive Carrie Lam announced last Saturday that the government would indefinitely postpone the bill that would allow extraditions to mainland China, in order to restore order and avoid further violence in the Asian financial hub. BLOOMBERG