How the Hong Kong social upheaval is affecting Sydney real estate
Continued pro-democratic protests in Hong Kong over the mainland government’s extradition policy has sparked a sharp increase in emigre’s headed for Sydney’s sunny north shores.
Whereas last year the majority of Chinese-born buyers were from the mainland, this year sees a marked change, with almost equal amounts of territory and mainland migrants. The lower north shore Avnu Centre has recorded a ten percent increase in Hong Kong buyers since this time last year, whilst mainland buyers have dropped off.
The people being seen coming to Sydney are from all aspects of Hong Kong life – from people in their thirties to their sixties, looking for properties anywhere in the one million to ten million dollar range, almost all skilled professionals, and prefer suburbs such as Mosman, Eastwood, Carlingford, and Chatswood.
So why are they coming?
The political turmoil and security uncertainty may be the leading cause, but there are other factors involved.
Firstly, Hong Kong is very expensive, more so than Sydney. Added to this, the mainland areas of China close to Hong Kong, such as Shenzhen, are just as pricey. Middle-class people can no longer afford to live and expand their families where they are. To them, the lower north shore of Sydney presents a more affordable, idyllic option. This is mirrored in current perceptions of other western countries, such as the US and the UK, with both facing social and political uncertainty in the face of Trump and Brexit respectively.
The other reason, which is linked to the political upset, is that Hong Kong is facing a recession – its first since the global financial crisis which began in 2008. Beijing expected Hong Kong’s economy to grow three percent in 2019, but it didn’t. It has slowed to zero-to-one percent. In other words, it is stagnant. Carrie Lam, Hong Kong Chief Executive, said about the downturn,
“This time, the economic downturn has been fast. Someone has described it as a tsunami. Compared with past downturns… I am afraid this is more serious”
One of Hong Kong’s biggest industries, tourism, is facing its most significant financial dip it has seen since the SARS outbreak of 2003, with room stay rates dropping up to 70 percent. This rolled on to retail, which dropped 23 percent in one year. Perhaps the largest impact has been felt from the decline in exportation, one of Hong Kong’s most lucrative industries, which is expected to fall four percent this year.
All this is not expected to abate soon. Considering the damage that the last twelve months has done to the cultural crossroads territory, it is not surprising that many Hong Kong people are seeking new shores to establish homes, start businesses, and raise families in an economically stable, socially secure place like Australia, and Avnu plans to help them.