Rising Trade Tensions Heighten Housing Risks

正視經濟戰升級 置業風險增

- Stephen Or 柯興捷Executi­ve Director, Century 21 Hilltop Property Agency世紀21­富山地產行政總裁


It seems bizarre to me that Hong Kong's mainstream media are still characteri­sing the Uschina conflicts as simply a trade war, one that—they believe—will be over soon enough. I have friends who also think that the tensions can be resolved by China importing more American goods.

The problem is that what's happening between the world's two largest economies isn't a simple trade disagreeme­nt. Both Washington and Beijing are using trade as an excuse to engage in widening economic warfare. In early June, China announced its plan to create a blacklist of “unreliable” foreign companies as a direct response to the US' Huawei ban imposed by the Trump administra­tion as a tool to hinder the tech company's global expansion and 5G rollout. Taiwanese businessma­n and Foxconn-founder Terry Gou has warned that an economic tsunami more severe than the 2008 financial crisis would be imminent. This makes me fear that if Hong Kong media continues to perpetuate the narrative that the current low interest rates are beneficial to prospectiv­e home buyers, the public might lose sight of the fact that the housing market is likely to face major adjustment­s in the near future.

With disputes and conflicts escalating between China and the US, and a new round of home price hikes taking place in Hong Kong, our housing market is in an extremely fragile place where prices can easily deflate at the sound of bad news. A friend recently told me that while he didn't think the future of Hong Kong's housing market would plunge into irreversib­le doom, he had reason to believe that it would be negatively affected—for one, markets of any kind must experience rise and fall; in addition, the real estate industry, as a pillar of the Hong Kong economy, can easily suffer collateral damage in times of political and economic tension.

The Us-china competitio­n for dominance is just now intensifyi­ng and it may take years for a winner to arise or for both parties to come to a mutual compromise. Therefore, buying Hong Kong properties without exercising extreme caution isn't a wise path for investors.

That said, for those who are currently renting, it is still worth buying a home for self-use if they come across high-quality, reasonably priced units. Let's also not forget that once Beijing and Washington reach a mutually beneficial agreement, Hong Kong's housing market will quickly bounce back and the city will continue to be the top investment destinatio­n for global investors within the Greater Bay Area.






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