The depreciation of Japan's yen may hit real estate demand in Hong Kong, warns property consultant Jones Lang LaSalle.
The currency has lost about 10 per cent in value against the United States dollar in the past two months to hit a three-year low, triggering concern among politicians and economists.
In a market analysis, Jones Lang LaSalle said the depreciation in the yen might cause competitive depreciation among other Asian countries.
This, in turn, could result in higher real estate costs in Hong Kong relative to other Asian markets, it said.
Cost comparisons, with the US dollar as the base, would show Hong Kong as relatively more expensive if Asian currencies depreciated, said the property consultant.
'Other things being equal, this may have an adverse impact on the demand for real estate from international investors and occupiers in Hong Kong,' it said.
The market analysis pointed out that the Hong Kong dollar link with the US dollar made real estate costs rigid, lacking adjustment through currency fluctuations.