HONG KONG • A controversial security law that threatens to upend Hong Kong’s status as an Asian financial hub has not slowed the world’s most expensive real estate market.
Dozens of would-be buyers lined up in the rain last week for a chance to bid for 94 apartments in The Campton project in central Kowloon, with prices starting at HK$6.8 million (S$1.22 million) for a one-bedroom condominium.
All but one of the units were snapped up in eight hours, bringing in HK$880 million for the developer, China Vanke.
“When the political system and economy are unstable, cash depreciates quickly,” said a woman named Li, who joined the line in the Tsim Sha Tsui neighbourhood. “I want to use up the money for an apartment to preserve value.”
On the surface, it does not seem like the best time to buy a property in Hong Kong. The future of the former British colony is clouded by China’s introduction of the security Bill, prompting the US to threaten removal of Hong Kong’s special status.
The legislation is triggering concerns about capital outflow, sparking renewed pro-democracy protests and increasing tensions in a city trying to recover from the pandemic. The economy is expected to see a record 7 per cent contraction this year.
For some residents, the political and economic turmoil make real estate a better bet than other assets. Last month, Sun Hung Kai Properties sold 97 per cent of its 298 apartments worth almost HK$2 billion in one day, according to the developer.
Ms Li, a housewife in her 40s, believes the housing market can withstand a deteriorating economy because the supply of homes will never catch up with demand.
“Hong Kong is a very small place,” she said outside the China Vanke project sales centre. “If you look at home prices 20 years ago and now, properties bought then are all making huge profits.”
The numbers back her up. Property prices have surged 230 per cent since 2000, data from Centaline Property Agency shows, bolstering the view of many Hong Kong residents that property will always be a haven.
Starting price of a one-bedroom unit at The Campton project in central Kowloon. All but one of the 94 units were snapped up in eight hours last week, bringing in HK$880 million (S$158 million) for the developer.
How much property prices in Hong Kong have surged since 2000, according to data from Centaline Property Agency.
Despite a contracting economy, existing home prices have risen 1.2 per cent this year, and are at their highest since last November, based on the Centaline index.
For now, home buyers seem willing to look past the risks.
“Hong Kong is one of the most liveable cities in China, if not Asia,” said Savills head of research and consultancy Simon Smith. “If it maintains its status as a global first-tier city, a gateway to China and an international financial centre, there is no reason why both the commercial and residential markets shouldn’t continue to thrive.”
Meanwhile, Japan has refrained from joining countries including the US and Britain in coordinated criticism of China’s move to impose the national security law.
Japan decided not to be a signatory to the countries’ joint statement on the proposed law as Tokyo tries to improve its diplomatic relations with China, Kyodo News reported.
It wants to avoid creating friction with China ahead of a planned state visit by Chinese President Xi Jinping, but its reluctance to criticise Beijing could disappoint the US and European countries.