Foreclosures set to surge as Hong Kong homeowners struggle with finances due to recession, rising unemployment
- The number of foreclosed properties could reach the highest level since the global financial crisis by early next year amid a worsening economy
- Foreclosures have increased by nearly 70 per cent year-on-year to 94 as of this month
“The number of foreclosed properties will surge next year to [between] 1,000 and 2,000,” said Henry Choi, a director at property auctioneer Century 21 Surveyors, comparing the situation in 2009 when a downturn induced by the global financial crisis led to 3,600 foreclosures.
“It is expected that the unemployment rate will rise and next year’s economy may be way [worse] than this year. The chain of business [activity] has been broken, with small and even [big] companies on the brink of survival.”
There were 94 foreclosed properties on the market this month versus 56 in June last year, and almost four times higher than the 19 recorded in the same month in 2018, according to Century 21 data.
02:02
Coronavirus: Hong Kong to ease social-distancing rules as city sees record 8.9% economic slump
The city’s economic outlook is bleak, with Morgan Stanley forecasting a 9.4 per cent contraction year-on-year in the second quarter, extending a slide for the fourth straight quarter. The US bank expects the economy to contract between 5.5 and 9.5 per cent for 2020.
The city’s unemployment rate for March to May rose to 5.9 per cent, the highest in more than 15 years, the statistics department said on Tuesday. The number of unemployed people stood at 230,400. The unemployment rate during the financial crisis in 2009 was 5.5 per cent.