Hong Kong Real Estate Shakes Off Taper Fears

Concerns that Hong Kong’s residential property prices could take a hit from any moves by the Federal Reserve to begin tapering its asset purchases might not pan out, analysts say.
After years of break-neck advances, with Hong Kong’s home prices more than doubling since 2008, many analysts have predicted sharp falls next year, in part on expectations there will be less liquidity sloshing around in the market after the Fed eases back on the easy money tap – a move also expected to push up interest rates.

But some are not convinced tapering will affect residential prices much.

“Residential property prices act more like short-duration assets, given their buyers’ funding reliance on short-term floating rate mortgages. A steeper yield curve, driven by higher long-term rates, will have limited impact on the immediate mortgage costs for a prospective homebuyer,” said Andrew Lawrence, an analyst at CIMB, in a note last week.

via Is Hong Kong’s real estate market taper proof?

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza