Hong Kong Property Market Roundup

In an attempt to contain Covid-19 cases, rigid border controls and travel restrictions were put in place earlier this year. With travel bans and a rigid 14-day quarantine period, this forced more residents to flee the city.

Naturally, this reduction in tourism had inevitable effects on the economy and the wider property market. As a result, government officials have since made the decision to loosen these travel restrictions. 

The city’s Leader, Carrie Lam, intends to lift the flight ban from nine countries, including the US and UK for Hong Kong travellers, along with a shorter quarantine period. Instead of 14-days hotel quarantine, these travellers will only be required to isolate for seven days. 

With these changes coming into effect as of April 1, international business will resume and bolster the Hong Kong economy. While this is a step in the right direction for the city, Hong Kong will continue to adopt a ‘no Covid approach’, and strict social distancing guidelines will remain for the foreseeable future.

Related: Will Omicron Restrictions Cause a Hong Kong Exodus?

Despite the economic turmoil caused by Covid-19, Hong Kong has been ranked third in the latest study of the world’s leading international financial centres. According to the Global Financial Centres Index, Hong Kong follows closely behind New York and London. 

After Covid-19 cases began spiralling throughout Hong Kong at the start of 2022, officials enforced stricter lockdown measures to curb the spread of the virus. Inhibiting most international travel to and from Hong Kong, this distinct lack of tourism has had ripple effects across the economy. 

That said, government officials have announced that Hong Kong’s financial markets have remained buoyant, with minimal disruption to capital flow. The Index, which surveys thousands of financial professionals across 119 cities, has suggested that Hong Kong’s ranking lies mostly in its quick reaction to the pandemic. 

“Hong Kong continued to rank top of the world as an international financial centre as of last year because both the mainland and Hong Kong had better control of the pandemic than other parts of the world,” said Robert Lee Wai-wang, the lawmaker for the financial services sector and CEO of Grand Capital Holdings. “It would, however, be a different story if the report had counted the fifth wave of outbreak in the past two months.”

After months of property growth, prices across Hong Kong are expected to plunge in the coming months. According to the property consultant Colliers, home prices could decline by up to 5% in the first half of 2022. 

Initial forecasts put this price growth at 3% in the mass-market and 5% in the luxury market, but since the fifth wave of Covid-19 has impacted the economy, businesses and everything in between, predictions are beginning to take this into account. 

Despite Carrie Lam’s decision to loosen travel restrictions, property prices are expected to remain under pressure in the short-term. As a result, many property developers have postponed new launches and projects until Q2, in the hope that price growth will have resumed by then. 

The lack of activity across the Hong Kong property market is making alternative hotspots more attractive to investors. The UK market has always been an investment goldmine for international investors, and with up to 20% price growth on the horizon, there’s now more incentive to invest than ever before. 

Related: Best Places to Invest in UK Property

Since the BN(O) Visa was introduced, thousands of Hongkongers have applied for a new life in the UK. While London is usually the first UK city that springs to mind, Birmingham is becoming increasingly popular amongst Hong Kong migrants. 

Birmingham is the second biggest city in the UK, but with properties half the price of London and an increasing number of opportunities, it is only attracting more Hongkongers. In comparison to London’s average property price of £521,146, Birmingham is considerably more affordable at around £209,000.

Although London will always be the first choice amongst a lot of migrants, the second city is a more affordable alternative and will only grow in popularity in the coming years. With HS2 and a myriad of regeneration projects on the horizon, Birmingham is set to rival the capital in more ways than one. 

This has not only made Birmingham more appealing to Hong Kong migrants, but it’s also made it an attractive investment location amongst overseas investors. From the Big City Plan to Birmingham Smithfield, these regeneration schemes are set to push up property prices by 24.5% in the next five years alone.

For Hong Kong investors looking for more affordable markets, find out more Birmingham property.