Concrete AnalysisCovid-19 and the end of the amateur landlord in Hong Kong and elsewhere

Investors or owners hoping to sell a home with a delinquent tenant will need to offer a steep discount

Small-time landlords taking large losses are unlikely to receive much sympathy as tenants hit by Covid-19 gain support

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Renters who received eviction notices at their flat units showed at their landlord’s mansion in this 2018 event. This time, victims of Covid-19 are ‘better protected’ by sympathetic governments and interest groups. Photo: Los Angeles Tenants Union

Published: 12:00pm, 2 Jun 2020Updated: 6:59pm, 2 Jun 2020

Real estate is in Hong Kong’s DNA. Government-induced land shortages, easy access to credit and a growing population made local property a good investment and the source of many family fortunes. Start with a 400-square-foot flat in Tai Po, trade up to a slightly larger unit in Sha Tin, rinse-and-repeat, and with a little luck you’d soon own a luxurious home in Mid-Levels.

Buying property abroad was a popular next step. Astronomical local prices and the peg-based strength of the Hong Kong dollar made overseas real estate look cheaper, even in historically expensive cities like London, New York and Tokyo.

In turbulent times, diversification remains a wise strategy.

Buyers were infamous for visiting property expos in Hong Kong’s five-star hotels and purchasing million-dollar homes off the plan, often in cities and neighbourhoods they’d never seen. Financing was easy to arrange and tenants paid the mortgage.

Sure, there was the occasional hiccough, like construction delays, bankrupt builders and delinquent tenants. But if you stuck with established developers and proven locations, you could not go too far wrong. Similar patterns played out with investors from Singapore, mainland China and elsewhere.

Covid-19 has changed all that.