Hong Kong real estate prices and demand stay strong despite roaring protests.
For the past few months, the people of Hong Kong have been engaging in massive protests against the government. Due to these events, tourism and retail profits have declined.
However, one thing that has not wavered is the demand and the sky-high prices of real estate in Hong Kong.
Despite the fact that the Mong Kok district has been the location for some of the most violent protests that Hong Kong has had this year, people still queued in a skyscraper there to buy some real estate.
The “Real” Real Estate Status
Real estate prices have not even budged from the past years, considering that they have increased by as much as 200% over the last ten years or so.
A quote from one worker echoes the sentiment of people regarding Hong Kong’s real estate prices: “I am not confident in the government, outlook or economy. I am only confident that Hong Kong property prices will not drop.”
Wheelock, a property firm in Hong Kong, only has 20% of their approximately 800 properties left since they released it last August. Sun Hung Kai Properties also sold nearly all of their flats in the Kowloon district, with one lone flat waiting to be sold.
Why Are The Prices So Strong?
The reason behind this strong real estate position boils down to people’s belief that an investment in real estate is a good move.
Since the start of the year, the price of real estate in Hong Kong rose by 10%. It took an insignificant dip around July when the protests were ramping up. The dip came to less than one percent.
Data shows that the miniscule dip did indeed come about due to the shocking price bumps. Sellers heard this and decided to drop the prices, cutting by 10 or 20% to entice more people to buy properties.
Upon asking several buyers, they said that the decline would not stay for long, and the prices would ultimately climb once again.
Another reason is because the Hong Kong government grants more than a hundred residential permits to people from Mainland China each and every day.
One final thing to look at is the current state of housing in the country. While Hong Kong has the most expensive real estate market, it is also known for living spaces that are smaller than normally expected.
Reserved for the poor of Hong Kong’s society, these living spaces are known as “cage homes”. It is only big enough to fit one bunk bed, and is surrounded by wire mesh. The bad part? Even the rent for these cage homes have been steadily rising.
The rent for one of these cage homes is currently at HK$7,000.
The option to rent is still available for residents. More rental residences are being pushed out every so often, with the focus being on small and medium apartments.