Hong Kong's property buyers are rushing for the sidelines to wait out city's festering political crisis and almost-daily protest rallies

By Lam Ka-sing kasing.lam@scmp.com / https://www.scmp.com/business/article/3019444/hong-kongs-property-buyers-are-rushing-sidelines-wait-out-citys-festering?utm_medium=partner&utm_campaign=contentexchange&utm_source=EdgeProp | July 23, 2019 2:45 PM SGT
Hong Kong's residents are rushing for the sidelines in the city's property market, as a political crisis festers while street rallies that have persisted for more than a month have deteriorated into violence.
Sales of lived-in homes will fall 35.5 per cent to a five-month low of 2,600 transactions in July, with the value expected to drop 33.7 per cent to HK$24 billion (US$3.07 billion), according to a forecast by Centaline Property Agency. Even the flipping of car-parking space - a unique short-term speculation in land-scarce Hong Kong - has already fallen by 52.4 per cent to fewer than 600 lots this month, from 1,261 last year, said Midland Realty.
"Buyers are adopting a wait-and-see attitude," as sentiments had been "affected by a series of incidents such as the protest rallies against the controversial extradition bill, and a developer who reneged on its commercial plot in the former Kai Tak airport," said Wong Leung-sing, senior associate director of research at Centaline.
The downbeat forecast for July is a blow to Hong Kong's property bull run, which had barely begun to recover its pace after a five-month stumble. HSBC and Bank of China (Hong Kong) cut their valuations of used homes in the New Territories and Kowloon on July 9, a month after an estimated 1 million people marched on the streets to oppose the city's controversial extradition bill.
Even though the bill is essentially "dead" according to Hong Kong's Chief Executive Carrie Lam Cheng Yuet-ngor, rallies persisted almost everyday, and are showing signs of deteriorating into violence. On Saturday, police made the largest seizure of the home-made explosive triacetone triperoxide (TATP) and arrested a man in connection with building an arsenal of weapons and fire-bombs on the eve of another major protest rally.
The total number of newly built and lived-in homes sold in Hong Kong plunged 44.3 per cent in June to 4,774 units, according to the Land Registry's data compiled by Hong Kong Property (Services). Only 102 shops changed hands in June, 34.2 per cent fewer than a month earlier, Midland said. The...