Two Hong Kong banks cut valuation of used homes as civic unrest threatens to knock property bull run off its footing

By Lam Ka-sing kasing.lam@scmp.com / https://www.scmp.com/business/article/3017911/two-hong-kong-banks-cut-their-valuation-used-homes-citys-civic-unrest?utm_medium=partner&utm_campaign=contentexchange&utm_source=EdgeProp | July 12, 2019 10:22 AM SGT
Two of Hong Kong's biggest commercial banks have cut their valuation of pre-owned homes in several housing estates in anticipation of declining prices, after the city was rocked over the past month by a record number of street protests.
HSBC and Bank of China (Hong Kong), two of the city's three currency printing banks, cut their valuations for used homes in the New Territories and Kowloon by up to 3.6 per cent, according to data on their websites.
"Valuations have dropped as a result of the political [upheaval in Hong Kong] since early June," said Centaline Mortgage Broker's managing director Ivy Wong Mei-fung, who provides financing services at one of the city's largest real estate agencies.
"Home price corrected in May ... the home market was downbeat and homeowners were willing to cut prices. The overall pricing of some estates fell."
Home prices in Hong Kong, which have topped the world for nine years, making it the world's most expensive urban centre to live in, are poised for declines as the biggest spate of civic unrest in the city's history threatens to push the property bull run off its footing.
As many as 2 million people were estimated to have taken to the streets on June 16 in opposition to a controversial extradition bill, unleashing a wave of public discontent that cancelled out a ceasefire in the US-China trade war and a dovish interest rate outlook.
The median home price may fall by 5 per cent in the second half of 2019, according to a forecast published today by global real estate services firm JLL, echoing a similar forecast in May by Knight Frank.
"The difficulties in resolving the ongoing trade war and slowing global economy will ultimately offset the potential of any interest rate cuts to dampen buying sentiment," said JLL's chairman and head of capital markets, Joseph Tsang, at a press conference in Hong Kong.
Hong Kong has been rocked by public protests such as this one on July 7 almost every day, since an estimated 1 million people took to the streets on June 9 in opposition to the controversial extradition bill. Photo: Edmond So alt=Hong Kong has been rocked by public protests such as this one on July 7 almost every day, since an estimated 1 million people took to the streets on June 9 in opposition to the controversial extradition bill. Photo: Edmond So