Lived-in home prices in Hong Kong's battlefield districts suffer the biggest declines as protest rallies extend into their 14th week

By Lam Ka-sing kasing.lam@scmp.com / https://www.scmp.com/business/article/3026435/lived-home-prices-hong-kongs-battlefield-districts-suffer-biggest-declines?utm_medium=partner&utm_campaign=contentexchange&utm_source=EdgeProp | September 11, 2019 11:57 AM SGT
As Hong Kong's unprecedented spate of civic unrest stretches into its 14th week, a slowdown in the world's most expensive home market is showing varying effects across different districts, proving the adage that location is everything in real estate.
The prices of lived-in homes near the Olympic subway station in western Mong Kok district, a densely populated neighbourhood that was the scene of clashes between protesters and police, have declined the most since June, according to data by Ricacorp Properties, which tracks 50 major housing estates. Prices in the area dropped by between 8 and 10 per cent in August, with prices in the Central Park flats plummeting by 24.3 per cent between June and July, while Island Harbourview fell 11.9 per cent, the data showed.
"As long as the [protest] movement remains, there is a risk," said Ricacorp's research head Derek Chan, adding that buyers are feeling the "mental impact" of protest rallies. "Mong Kok and Prince Edward may be considered more dangerous. The districts that are more peaceful and which had seen less harassment by protests are naturally more popular among buyers."
Hong Kong's real estate market, ever so sensitive to the city's macroeconomic and political climate, is trying to find its footing as three months of protest rallies show no sign of letting up. The city's economy, already crimped by a year-long US-China trade war, must prepare for tougher times ahead, as retail sales had slumped while visitor numbers have dwindled.
The average price of used homes across Hong Kong fell 0.7 per cent in May, according to figures released by the Rating and Valuation Department, as market sentiment was battered by the escalating trade war, and as the city's rallies turned violent. The Centa-City Leading Index slid 1.6 per cent from the end of July to September 1.
The September 4 announcement by Hong Kong's Chief Executive Carrie Lam Cheng Yuet-ngor to withdraw the government's controversial extradition bill, whose very inception was the genesis of the three-month long rallies, failed to cool the seething public anger or stem the violence.