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Hong Kong Housing Mark Could Drop 10 to 20 Percent

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.

via CNBC [1]

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Alfonso Esparza

Alfonso Esparza [6]

Senior Currency Analyst at Market Pulse [7]
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