Hong Kong Could Lose Foreign Real Estate Investors to Singapore, Japan

China’s rising political control in Hong Kong could make the city less attractive to foreign real estate investors, reports the South China Morning Post.

William Hughes, global head of real estate research and strategy at UBS Asset Management, says that Hong Kong was considered the top investment destination a few years ago but China’s rising political influence in Hong Kong has eroded the city’s independence. This means the city’s property market would become more domestic driven as foreign investors redirect their money to other countries.

"Today, Hong Kong may come after Japan, Australia and Singapore," says Hughes. But Hughes says the redirection of capital to other countries has no significant impact on Hong Kong's property market and notes a positive outcome.

Hughes explains that if foreign investment decreases, the weakened demand could help stabilize property prices and improve investment yield.

Property prices in Hong Kong have been driven up by an influx of capital over the years, which compressed yields to 2 to 4 per cent per annum, according to the Post.

 

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