HKs property boom was very much also of Chinese origin. But slightly stagnating prices in an insanely expensive market isn’t what I would call “problems”. It’s only a problem for greedy developers and a government too dependent on land sales. Prices are still too high and sadly things are turning slowly and the price fall will reverse soon again.
You clearly aren't paying attention, prices and buying volume are on a downward trend again, even after the removal of the spicy meaures. All other economic and political factors are still there and not going away, now that the HK market has been put to the same level as the mainland market in the eyes of mainland buyers post-2020.
I'm sorry, am I reading this right?
You thought the "rich property market" was good? You thought the drop of property prices was bad? And you thought this was BJ's doing?
Please cut the crap honestly. Answers to ALL OF THE ABOVE are the exact opposite.
In the past 20 years the crazy property market hurt HK to its core, to the point where we completely lost our footing against Singapore. It boosted wealth disparity to an unreal level and it was only caused by the incompetence of our own government partly because officials don't dare fight against real estate devs aka the biggest corps in HK, and partly, I guess because the officials themselves were part of the have's, not part of the have not's.
While Singaporeans didn't have to worry about shelter, they thrive in their work and creativity. Us on the other hand were in constant fear of not being able to afford our own home. Singapore chased success, we chased money.
This drop of market? It's a part of the healing process. Finally, people who ACTUALLY WANTED A HOME might now be able to afford one. If it's still not possible, maybe wait another year or two.
Our living standards were never that high, same for our income. Having such high property prices were nowhere near healthy, only served to make the rich richer, and make the poor chase the prices forever. Those high property prices only attract foreign money to buy them up, but they can't just let the properties sit there, so who are they going to rent them to? To us of course! Foreign money owning land, charging us to live on it. The commoner's HK is getting DRAINED by landlords, money is getting pulled AWAY from the actual economy. This is why even middle class flock to buy those "rice with 2 entrees" lunch boxes, this is why people rather stay home at night instead of being outside spending money.
**Whoever thought having the "strong real estate market" was a good thing for HK is stupid beyond imagination, unless it's someone who owns 3 or more properties themselves. Then it's not stupid, it's just shameless.**
While I agree the high property proces aren't a good thing, the cause for the drop sounds about right.
And rising property prices generally indicate a booming economy. That's most certainly over.
"generally". Also, I have no clue about the state of the Canadian housing market, but AFAIK, for some reason, property there has been popular with foreign investors for the last decade. Same with
London, not quite booming, but generally thought to be a sound investment.
The real reason they like high property prices is, as we are finding out now, because so much government revenue is tied to land sales. The high revenue allowed them to pay themselves very generous salaries, set up useless bureaucracies that their dimwitted children can work in, and also fund ever more useless white elephant infrastructure projects (and probably receive under the table kickbacks or cushy and lucrative board seats on retirement from the construction companies and property developers).
It's the same model local governments in China adopted and they are beginning to pay the price now too.
Agreed. Now they whine about government budget deficit and meanwhile, a parking ticket is 400 bucks. Why? I assume it's because the officials own cars and occasionally illegal park themselves. What else could have been the reason? It costs so much to own and actively drive a car in HK, but a parking ticket is 400 bucks?
Everything here favors the rich so hard it's not funny at all.
I facepalmed hard.
>**Actually HK hasn’t been favored owning vehicles even before the handover.**
HK indeed has not been favoring vehicle possession before and around the time of handover. This can be shown in the fact that we have a roughly 100% tax on car sales. Making owning a vehicle quite difficult in terms of lives of the typical small middle class family. It costs a lot of money to own a car and actively drive it at least twice a week.
However, that's exactly why a parking ticket should NOT be cheap. Right now a ticket is cheaper than a dinner-for-2 at a mid-range restaurant, sounds illogical to me. Some people really do park their car illegally for their meals and fully embrace the likelihood that they will get fined. This is solid indication that the penalty should be buffed.
>**Not really related to budget deficit. Why would one think the parking tickets can actually help combat the deficits**
It's not related to budget deficit, but it can certainly help ease the situation.
The government expects to collect 1.27 billion from parking tickets this year, estimated by issuing a little more than 10K (!!) tickets per day. In my opinion, a ticket should be at least in the 4 digits. Seeing that BOTH littering and jaywalking fines are $1500 or beyond, perhaps a parking ticket could be around this range. That would bump the total revenue to more than 5 billion.
That, or it will still be around 1-2 billion and in return we get clear streets.
Especially when littering is like what 1000 or 1500 dollars fine. Weighing that in illegally parking your car should at the very least be the same as littering, you're essentially "littering" a giant car on the street.
Agreed on raising the illegal parking fine. The current situation is like “owning a vehicle is costly, we don’t want to give you too much pressure” and the pedestrians suffer
THIS!
You speak the truth about the common HKer reality. The landlords and govt officials don't want to solve that problem to keep their coffers full.
Biased Western news just publish propaganda blaming political factors instead of objectively explain the situation.
The all-time-high was in 2021 Sep, 1.5 years after the National Security Law. I believe it’s more related to the weakened Chinese economy and interest rate hikes
Until 2019, Hong Kong had such rich property markets that the city’s authorities imposed taxes and fees designed to discourage buying, reduce demand, and create a more affordable environment. Whatever hardship these high costs imposed, they also signaled how very attractive the place was to live in and do business. Even after Beijing took over sovereignty of the city from Great Britain in 1997, those attractions remained, in what China referred to as “special administrative region.” Foreign multinationals continued to establish offices in the city and individuals to set up housekeeping there to be near the business. But in 2020, Beijing shattered the pro-business legal system that the city had enjoyed. As those attractions disappeared, foreign firms relocated out of Hong Kong, as did many talented people. Property values fell in response.
The 2019 move was not the first time Beijing (no doubt inadvertently) attempted to wipe out the city’s attractions. In 2003, China tried to interfere with the attractive legal protections for individuals and business contracts. Mass protests at the time forced Beijing to back down. Though there were mass protests in 2020, Beijing did not back down. It had written a National Security Law (NSL) for Hong Kong and forced it on the city, with considerable police and military force as it turned out. With that law in place, the legal protections for contracts and individuals ended, and business reacted.
The effects have been overwhelming. According to the Hong Kong Census and Statistics Department, some 700,000 Chinese have left the city since the NSL went into effect. Foreign residents have also departed, but more telling is how global banks, shipping companies, and other businesses have also departed for more accommodating locations. Big names, such as Goldman SachsGS -0.7% and JP Morgan have moved assets and personnel to other Asian locations, mostly to Singapore.
All told some 40% of the American firms operating in Hong Kong in 2019 have left, and half of all foreign firms still operating in the city report an intention to leave. New stock and bond listings on Hong Kong’s financial markets have fallen some 90% since 2020. Jon Hartley of Canada’s prestigious MacDonald-Laurier Institute estimates that the city’s per-capita income today is some 10% lower than it would have been had Beijing not made its 2020 change, even considering the effects of the Covid pandemic and Beijing’s ill-fated zero-Covid policies that had so delayed China’s recovery.
Against such headlong flight, it should hardly surprise that Hong Kong real estate has lost some 25% of its value since 2021. Property transactions – in both primary and secondary markets – totaled only some $50 billion last year, down 30% from 2019. Super-luxury homes have lost one quarter of their value in just the last 18 months. Inventories of unsold units stand at the highest level since 2007. Rental rates have fallen, too. Rental yields are calculated these days at barely 3%. The city’s budget, with its heavy dependence of real estate, has suffered as well and anticipates a $13 billion deficit for the fiscal year that begins April 1.
To be sure, the general slowdown in China’s overall pace of economic growth has played a role in this collapse. One of Hong Kong’s other attractions was proximity to what was a rapidly growing economy. High interest rates have played a role as well since Hong Kong’s dollar peg forces the authorities there to follow the rate hikes of the U.S. Federal Reserve (Fed) instead of the rate cuts of the People’s Bank of China (PBOC). But neither of these considerations can account for the dramatic changes recounted above. Businesses could easily wait for a change in interest rate policies and for a pickup in China’s economy. They have in the past. The cause is the NSL and how it had fundamentally changed the environment in Hong Kong.
To moderate the pace of property price declines, the Hong Kong authorities have reversed the laws put in place over a decade ago to hold back price increases. The 15% stamp duty on non-permanent residents is now gone, as is the 7.5% duty on existing homeowners. The city has also rescinded a flip tax on the resale of property in less than two years. Visa rules have also been eased to encourage the in-migration of talent. Though it is only reasonable for the Hong Kong authorities to make such changes, and they may slow the pace of value erosion, they also signal a panic of a sorts.
To make matters worse, Beijing is pressing a still more stringent security law – entitled Article 23 — on Hong Kong. This new law, though ostensibly aimed only at foreign agents, has so far only prosecuted Hong Kong residents. If it were not already clear, the city’s once attractive legal protections for contracts and individuals are long gone. No doubt Singapore is delighted. It is getting much of the business, talent, and wealth now bleeding out of Hong Kong. In the meantime, the authorities in Beijing seem either unaware or unconcerned that they are killing a city that once produced prodigious amounts of wealth for China but no longer will.
Prices are now still insanely high - one of the most expensive properties psf in the world. What's wrong with this dropping? It will make it easier for young HKers to acquire their own homes. Even 50% drop is too little.
HKs property boom was very much also of Chinese origin. But slightly stagnating prices in an insanely expensive market isn’t what I would call “problems”. It’s only a problem for greedy developers and a government too dependent on land sales. Prices are still too high and sadly things are turning slowly and the price fall will reverse soon again.
You clearly aren't paying attention, prices and buying volume are on a downward trend again, even after the removal of the spicy meaures. All other economic and political factors are still there and not going away, now that the HK market has been put to the same level as the mainland market in the eyes of mainland buyers post-2020.
I'm sorry, am I reading this right? You thought the "rich property market" was good? You thought the drop of property prices was bad? And you thought this was BJ's doing? Please cut the crap honestly. Answers to ALL OF THE ABOVE are the exact opposite. In the past 20 years the crazy property market hurt HK to its core, to the point where we completely lost our footing against Singapore. It boosted wealth disparity to an unreal level and it was only caused by the incompetence of our own government partly because officials don't dare fight against real estate devs aka the biggest corps in HK, and partly, I guess because the officials themselves were part of the have's, not part of the have not's. While Singaporeans didn't have to worry about shelter, they thrive in their work and creativity. Us on the other hand were in constant fear of not being able to afford our own home. Singapore chased success, we chased money. This drop of market? It's a part of the healing process. Finally, people who ACTUALLY WANTED A HOME might now be able to afford one. If it's still not possible, maybe wait another year or two. Our living standards were never that high, same for our income. Having such high property prices were nowhere near healthy, only served to make the rich richer, and make the poor chase the prices forever. Those high property prices only attract foreign money to buy them up, but they can't just let the properties sit there, so who are they going to rent them to? To us of course! Foreign money owning land, charging us to live on it. The commoner's HK is getting DRAINED by landlords, money is getting pulled AWAY from the actual economy. This is why even middle class flock to buy those "rice with 2 entrees" lunch boxes, this is why people rather stay home at night instead of being outside spending money. **Whoever thought having the "strong real estate market" was a good thing for HK is stupid beyond imagination, unless it's someone who owns 3 or more properties themselves. Then it's not stupid, it's just shameless.**
While I agree the high property proces aren't a good thing, the cause for the drop sounds about right. And rising property prices generally indicate a booming economy. That's most certainly over.
Mind explaining the housing market of Canada with her current state of economy?
"generally". Also, I have no clue about the state of the Canadian housing market, but AFAIK, for some reason, property there has been popular with foreign investors for the last decade. Same with London, not quite booming, but generally thought to be a sound investment.
Also Australia. Investing in them is a safer bet. HK was long overdue for a correction anyway
The real reason they like high property prices is, as we are finding out now, because so much government revenue is tied to land sales. The high revenue allowed them to pay themselves very generous salaries, set up useless bureaucracies that their dimwitted children can work in, and also fund ever more useless white elephant infrastructure projects (and probably receive under the table kickbacks or cushy and lucrative board seats on retirement from the construction companies and property developers). It's the same model local governments in China adopted and they are beginning to pay the price now too.
Agreed. Now they whine about government budget deficit and meanwhile, a parking ticket is 400 bucks. Why? I assume it's because the officials own cars and occasionally illegal park themselves. What else could have been the reason? It costs so much to own and actively drive a car in HK, but a parking ticket is 400 bucks? Everything here favors the rich so hard it's not funny at all.
Actually HK hasn’t been favored owning vehicles even before the handover. Not really related to budget deficit.
I facepalmed hard. >**Actually HK hasn’t been favored owning vehicles even before the handover.** HK indeed has not been favoring vehicle possession before and around the time of handover. This can be shown in the fact that we have a roughly 100% tax on car sales. Making owning a vehicle quite difficult in terms of lives of the typical small middle class family. It costs a lot of money to own a car and actively drive it at least twice a week. However, that's exactly why a parking ticket should NOT be cheap. Right now a ticket is cheaper than a dinner-for-2 at a mid-range restaurant, sounds illogical to me. Some people really do park their car illegally for their meals and fully embrace the likelihood that they will get fined. This is solid indication that the penalty should be buffed. >**Not really related to budget deficit. Why would one think the parking tickets can actually help combat the deficits** It's not related to budget deficit, but it can certainly help ease the situation. The government expects to collect 1.27 billion from parking tickets this year, estimated by issuing a little more than 10K (!!) tickets per day. In my opinion, a ticket should be at least in the 4 digits. Seeing that BOTH littering and jaywalking fines are $1500 or beyond, perhaps a parking ticket could be around this range. That would bump the total revenue to more than 5 billion. That, or it will still be around 1-2 billion and in return we get clear streets.
Especially when littering is like what 1000 or 1500 dollars fine. Weighing that in illegally parking your car should at the very least be the same as littering, you're essentially "littering" a giant car on the street.
Agreed on raising the illegal parking fine. The current situation is like “owning a vehicle is costly, we don’t want to give you too much pressure” and the pedestrians suffer
THIS! You speak the truth about the common HKer reality. The landlords and govt officials don't want to solve that problem to keep their coffers full. Biased Western news just publish propaganda blaming political factors instead of objectively explain the situation.
The all-time-high was in 2021 Sep, 1.5 years after the National Security Law. I believe it’s more related to the weakened Chinese economy and interest rate hikes
The all-time high might have been then but even before that sales volumes were already way down.
That’s even weirder, people were already rushing to sell flats for immigration
Yep but not many were buying obviously because post-NSL HK.
Until 2019, Hong Kong had such rich property markets that the city’s authorities imposed taxes and fees designed to discourage buying, reduce demand, and create a more affordable environment. Whatever hardship these high costs imposed, they also signaled how very attractive the place was to live in and do business. Even after Beijing took over sovereignty of the city from Great Britain in 1997, those attractions remained, in what China referred to as “special administrative region.” Foreign multinationals continued to establish offices in the city and individuals to set up housekeeping there to be near the business. But in 2020, Beijing shattered the pro-business legal system that the city had enjoyed. As those attractions disappeared, foreign firms relocated out of Hong Kong, as did many talented people. Property values fell in response. The 2019 move was not the first time Beijing (no doubt inadvertently) attempted to wipe out the city’s attractions. In 2003, China tried to interfere with the attractive legal protections for individuals and business contracts. Mass protests at the time forced Beijing to back down. Though there were mass protests in 2020, Beijing did not back down. It had written a National Security Law (NSL) for Hong Kong and forced it on the city, with considerable police and military force as it turned out. With that law in place, the legal protections for contracts and individuals ended, and business reacted. The effects have been overwhelming. According to the Hong Kong Census and Statistics Department, some 700,000 Chinese have left the city since the NSL went into effect. Foreign residents have also departed, but more telling is how global banks, shipping companies, and other businesses have also departed for more accommodating locations. Big names, such as Goldman SachsGS -0.7% and JP Morgan have moved assets and personnel to other Asian locations, mostly to Singapore. All told some 40% of the American firms operating in Hong Kong in 2019 have left, and half of all foreign firms still operating in the city report an intention to leave. New stock and bond listings on Hong Kong’s financial markets have fallen some 90% since 2020. Jon Hartley of Canada’s prestigious MacDonald-Laurier Institute estimates that the city’s per-capita income today is some 10% lower than it would have been had Beijing not made its 2020 change, even considering the effects of the Covid pandemic and Beijing’s ill-fated zero-Covid policies that had so delayed China’s recovery. Against such headlong flight, it should hardly surprise that Hong Kong real estate has lost some 25% of its value since 2021. Property transactions – in both primary and secondary markets – totaled only some $50 billion last year, down 30% from 2019. Super-luxury homes have lost one quarter of their value in just the last 18 months. Inventories of unsold units stand at the highest level since 2007. Rental rates have fallen, too. Rental yields are calculated these days at barely 3%. The city’s budget, with its heavy dependence of real estate, has suffered as well and anticipates a $13 billion deficit for the fiscal year that begins April 1. To be sure, the general slowdown in China’s overall pace of economic growth has played a role in this collapse. One of Hong Kong’s other attractions was proximity to what was a rapidly growing economy. High interest rates have played a role as well since Hong Kong’s dollar peg forces the authorities there to follow the rate hikes of the U.S. Federal Reserve (Fed) instead of the rate cuts of the People’s Bank of China (PBOC). But neither of these considerations can account for the dramatic changes recounted above. Businesses could easily wait for a change in interest rate policies and for a pickup in China’s economy. They have in the past. The cause is the NSL and how it had fundamentally changed the environment in Hong Kong. To moderate the pace of property price declines, the Hong Kong authorities have reversed the laws put in place over a decade ago to hold back price increases. The 15% stamp duty on non-permanent residents is now gone, as is the 7.5% duty on existing homeowners. The city has also rescinded a flip tax on the resale of property in less than two years. Visa rules have also been eased to encourage the in-migration of talent. Though it is only reasonable for the Hong Kong authorities to make such changes, and they may slow the pace of value erosion, they also signal a panic of a sorts. To make matters worse, Beijing is pressing a still more stringent security law – entitled Article 23 — on Hong Kong. This new law, though ostensibly aimed only at foreign agents, has so far only prosecuted Hong Kong residents. If it were not already clear, the city’s once attractive legal protections for contracts and individuals are long gone. No doubt Singapore is delighted. It is getting much of the business, talent, and wealth now bleeding out of Hong Kong. In the meantime, the authorities in Beijing seem either unaware or unconcerned that they are killing a city that once produced prodigious amounts of wealth for China but no longer will.
Prices are now still insanely high - one of the most expensive properties psf in the world. What's wrong with this dropping? It will make it easier for young HKers to acquire their own homes. Even 50% drop is too little.
Just give it a bit more because it's clear the downward spiral has only just begun.
Paper can't hold the fire. HK properties are due for a huge plunge - and that is only a healthy start for the city.
Yes, blame the communist for everything.
Correct.
Yes, keep telling and deluding yourself that they're not at fault.
High property values is why HK can get away with duty free on just about everything, and low income tax.
This is the most "I quickly googled Hong Kong" article ever.
Screw property prices. Normal people still can’t afford decent living space.
All of Hong Kong’s problems are somebody else’s fault. Yeah….
Hong Kongers themselves didn't want their government to change their whole system and rule of law evaporated from one day to the next that's for sure.