[CC may contain inaccuracies] We saw developer shares really showing that market watchers were a little bit surprised by that full elimination.
But is it really going to be the sort of cure for further woes of the real estate
sector? Yeah, I think that at this point, the
problems within Hong Kong's property market are just still so severe.
Now, these are curbs that were introduced in the aftermath of the
global financial crisis. The idea was that at the time interest
rates were plunging. They really needed to cool homebuyer
demand down. But they've existed for so long because
that just really hasn't happened. I mean, Hong Kong is still world's least
affordable housing market. And so but at the same time, you're
still having all of these issues with the homebuyer demand that's ultimately
leading to these property curbs to be removed, obviously.
You mentioned the markets weren't expecting something that was this
severe. But at this point, when you've got
interest rates declines, the remaining in Hong Kong right now, it's difficult
to see how this leads to ultimately a longer term improvement within the local
property market. So I think what a lot of investors are
looking out for right now is whether you see sort of any short term gains.
I think we have to look to see what happens with any future property sales
on the market. But at this point, it's just really not
clear that this is going to lead to any sort of long term sustainability within
the housing market. How strong is a correlation between
whether or not we see a sustained pickup in the Chinese economy?
You talk about the malaise across the property sector.
Tourism, retail slowed down as a result in Hong Kong.
Does that is that really the crux of when we'll see a recovery for Hong Kong?
Yes. I mean, I think you nailed it at this
point. You know, this economy is incredibly
tied to what's happening within the broader Chinese economy.
We saw this during the pandemic in particular.
I mean, you know, obviously, Hong Kong had a lot of its own issues with sort of
isolating itself from the rest of the world during the pandemic, but also the
slowdown in growth that we're seeing within China's economy feeds into some
of these broader concerns right now. Hong Kong is trying to deal with a bunch
of other headwinds. Tourism, in particular, is a massive
issue. We've seen a big drop off over the last
several years. This budget that Hong Kong announced
just yesterday did include some measures to sort of tourism pick up again, really
remains to be seen how much that's going to play into it.
But when you've got, you know, sort of a lack of visitors from mainland China, in
particular, a major source of tourism revenue for Hong Kong because of some of
these broader issues with China's eroding wealth within the middle class,
I think that it's going to be kind of difficult for Hong Kong to actually see
a meaningful turn around. We've seen them forecast growth of
around 3.2% over the next several years. We'll see whether that comes to
fruition.
