Demand for Hong Kong’s luxury homes slips as trade war, threat of extradition bill rattle wealthy investors
- The proposed law that sparked weeks of mass rallies has made some super-rich investors look beyond Hong Kong to park their wealth, says Savills
- Prices of town houses, typically ranging from 2,000 to 4,000 square feet, fell 1.5 per cent in the second half
The double whammy of the US-China trade war and the threat of a controversial extradition bill that led to weeks of mass rallies in Hong Kong has hit demand for the city’s ultra-luxury homes, new figures show.
Property consultancy Savills said enquiries about homes priced between HK$40,000 (US$5,111) and HK$100,000 per square foot fell in the second quarter of the year, leading to a 1.5 per cent slide in prices of town houses, whose size typically ranges from 2,000 to 4,000 square feet.
It was the first fall in town house prices since the third quarter of 2018 and comes on the back of increases of between 1.5 per cent and 4.3 per cent.
“Sentiment was mostly affected by external uncertainties. And the proposed extradition bill, though retracted, may have also pushed some high net worth [individuals] to at least rethink their asset allocation strategy within Asia,” said Edina Wong, senior director of residential services at Savills.
The proposed new law, and its widely perceived potential to undermine Hong Kong’s judicial and political independence, led ultra high net-worth and high net-worth individuals to look elsewhere to park their wealth, with Singapore, the city’s main financial rival, getting a boost.