A combination of slowing demand from mainland Chinese buyers, higher interest rates and tight property restrictions could present a perfect storm for Hong Kong’s real estate market, according to an economist at HSBC.
Housing prices in the Asian financial capital, which have skyrocketed in recent years, could correct 10-20 percent as a result, said Frederic Neumann, Co-head of Asian Economics at the bank.
“I think the [cooling] measures that we’ve seen imposed certainly put a dampener on the market. But if you look ahead there are also other headwinds coming in, a China slowdown is certainly going to weigh on property prices,” Neumann told CNBC Asia’s “Squawk Box” on Monday.
“And we have higher U.S. dollar interest rates [which] directly feed into Hong Kong as well,” he added. Hong Kong’s monetary policy mirrors that of the U.S. given its currency peg to the greenback.
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