Uncertainty caused by Hong Kong Human Rights and Democracy Act likely to dent surging Chinese demand for New York property, say agents

By Cheryl Arcibalcheryl.arcibal@scmp.com / https://www.scmp.com/business/china-business/article/3040387/uncertainty-caused-hong-kong-human-rights-and-democracy-act?utm_medium=partner&utm_campaign=contentexchange&utm_source=EdgeProp | December 4, 2019 1:45 PM SGT
An upswing in mainland Chinese demand for property in New York City could soon be dampened by new legislation in Washington that supports Hong Kong's protest movement and strains already frayed relations between the world's two biggest economies, say analysts.
Demand for property in the Big Apple from mainland China has increased between 15 and 20 per cent since the summer, according to Christie's International Real Estate (CIRE). That has been driven by a sense among investors that New York offers some stability in a world increasingly rocked by geopolitical upheaval, agents said.
But it could soon be cancelled out by the passage of the Hong Kong Human Rights and Democracy Act, that creates further uncertainty for investors as the US and China slog it out in a bruising trade war. The legislation paves the way for diplomatic action and economic sanctions against Hong Kong's government.
The recent signing of the act into US law has angered Beijing at a time when its relations with Washington were already under immense strain.
On top of the long-running trade spat and, it adds to the perception that the US does not welcome investment from China.
"The [legislation] certainly dampens interest in US property, not just by itself, but the continuing strained relationship in the future which is not conducive to cross-border investment," said Koh Keng Shing, chief executive and founder of Landscope Christie's International Real Estate. "The US is scrutinising everything from China and Hong Kong and that will deter investors."
The worsening relations between Washington and Beijing will not help bilateral investments, said Maggie Hu, assistant professor of real estate and finance at the Chinese University of Hong Kong.
"The long-term effect on the economy or the property market will depend on future implementation of this [legislation]," she said.
But not everyone believes it will have an impact.
"New York is one of the few cities that can hover above much of the current geopolitical chaos. It is unaffected by Brexit, the Hong Kong protests, or the trade...