Occupy Central a danger to the Hong Kong property market, Barclays Bank warns

"Unexpected shocks" like the planned Occupy Central protest could trigger a property market slump, leading international bank Barclays warned yesterday.

And it would take Hong Kong longer to recover than after the crashes of 2003 and 2008, it said.

Barclays said prices had deviated too much from fundamentals, making the property market vulnerable to such shocks. Paul Louie, the bank's head of research for property in Asia ex-Japan, said in a report: "If a shock were to occur, we believe the subsequent recovery could take a long time, and better resemble 1998 [than the two later crises]."

Home prices fell 56 per cent between 1997 and 1998 after the Asian financial crisis. It took eight months for the prices to hit a trough and another five years to recover to the pre-crisis level.

In comparison, it took seven months in 2003 after the outbreak of severe acute respiratory syndrome (Sars) and a year in 2008 after the global financial crisis for prices to return to their previous levels.

Louie made only a vague reference to the Occupy Central movement in his report.

But he told the South China Morning Post later that the planned blocking of Central streets by pro-democracy protesters "could be one of the unexpected shocks".