Expats fear Hong Dong doom and gloom may be terminal

As the future of Hong Kong becomes more difficult to predict with any certainty, its social tensions are being reflected in its expat lifestyles and property prices.

Last year’s seemingly endless demonstrations had already taken a toll on the city’s luxury property purchase and leasing, with China’s recent release of its new laws worsening the situation. Upscale residential properties are now facing another double whammy as buying and leasing declines and more long-term expat residents decide it’s time for a change of location.

Market sentiment is continuing to weaken as the threat of a recession looms, with homeowners planning to head to more secure destinations offering increasing discounts to encourage sales. Offloading properties in order to lock in profits or reallocate freed-up capital seems to now be the way forward for home owners as well as investors in the city.

The fall in leasing is representing an expat exodus from the region, partly as a reaction to China’s latest move but also demonstrating a loss of confidence in the future of the island as a world financial hub. Even long-stay expats are now looking to relocate and new arrivals are few, thus causing the high-end leasing market to decline. Another reason is that shrinking household budgets are forcing downsizing as the threat of a recession looms.

Many expats who’ve been the mainstay of the community for years are now seeing their gloomy predictions coming true as their privileged lifestyles fade. Over the past year and even before the pandemic and China’s moves, many expat professionals were predicting exactly what’s now happening but were deterred from leaving by the hope that, as before, this unique concept would right itself in the long term. Sadly, the present-day toxic combination of pandemic and politics may well prove them wrong.