Hongkongers are looking to pick up global properties on the cheap, as a global market rout crushed major currencies and emergency rate cuts shaved borrowing costs.
Given that funding costs have declined after the U.S. Federal Reserve led global emergency rate cuts and Hong Kong dollar has stayed strong against other major currencies, deep-pocketed investors in Hong Kong are now scanning globally for good properties to invest in. Others are looking to emigrate from the city after experiencing months of social unrest in 2019.
«In almost every market where Hong Kong buyers are significantly active, they can buy property for much cheaper now than just a couple of weeks ago. The economic fallout is pushing other currencies down as investors fled to the safety of the US dollar,» said Georg Chmiel, executive chairman of Juwai IQI, an international property portal, who was quoted in «South China Morning Post».
Hong Kong Dollar Stayed Strong
The Hong Kong currency is trading at the stronger end of its band through the market carnage, due to its decades-old peg to the US dollar. It has appreciated by between 4.7 percent and 15.5 percent so far this year against top major and regional currencies, including the British pound, Canadian dollar, Australian dollar, Euro and Singapore dollar, according to Bloomberg Market data.
In Australia, downtown Brisbane, a 600-sq ft, two-bedroom flat can be bought for HK$1.8 million can be leased out within three months, given low vacancy rates and strong demand from expatriates, according to Midland Realty. In contrast, a 604-sq ft flat at the 25-year-old Kornhill development in eastern Hong Kong changed hands last week for HK$10.3 million, according to Midland Realty.
Interest In Main Cities
«We have seen an over 300 percent increase in client requests for buy-side support since the coronavirus outbreak. The main cities of interest are Sydney, London, and Lisbon,» said Jonathan Benarr, director of APAC at Quintessentially Estates, a global property portal.
Meanwhile, the slide in Hong Kong’s rents is getting steeper as the coronavirus crisis and protests lead to job losses and an exodus of expatriates. Rents in high-end districts have been hit hardest, tumbling by up to a quarter from their peaks, according to property agents. The average rate across the whole city slumped to the lowest in almost three years in February, data from real estate agency Habitat Property showed.
