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Opinion | Property market frenzy and a deep recession reveal the reality of two unequal Hong Kongs

  • Stock market and real estate excitement contrasts with Hong Kong’s prolonged recession amid the Covid-19 pandemic and rising unemployment
  • The government’s decision to abandon a planned vacancy tax on unoccupied flats risks further polarising a city that is already rife with inequality

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Potential homebuyers line up at a sales office in Tsim Sha Tsui, for CK Asset’s 98 units at El Futuro in Sha Tin. The frenzy in the property market stands in sharp contrast to Hong Kong’s ongoing recession and high unemployment. Photo: Xiaomei Chen
October told a tale of two Hong Kongs, judging by a swirl of seemingly conflicting economic headlines. In a month when the city’s coronavirus-battered economy sent the unemployment rate to a 16-year-high of 6.4 per cent, the high drama was Cathay Pacific’s decision to slash 8,500 positions and fold its regional Cathay Dragon brand.
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In a parallel universe, stock market excitement bubbled over before Chinese fintech company Ant Group’s planned US$35 billion dual listing in Hong Kong and Shanghai was shelved at the last minute. Meanwhile, in a property market frenzy, a new housing estate in the New Territories had the best response from potential buyers since 1997 – applications for the first two batches of flats released were oversubscribed by almost 60 times.

Built atop an MTR interchange, with the draw of a large shopping centre, units in the new project are priced at an average of more than HK$20,000 (US$2,600) per sq ft, which is competitive even against second-hand mass residential properties in Sha Tin.

While the low interest rates and easing of pandemic fears would have helped the sales, the fact remains that a glut of flats released elsewhere before the Covid-19 outbreak in January is still largely unsold.

The latest home-buying frenzy reflects the successful sales tactics behind a particular project, rather than a property market revival. It is an anomaly that lays bare a widening wealth gap in an increasingly warped society.

04:11

Tiny 290sq ft temporary housing a welcome upgrade for some low-income Hong Kong families

Tiny 290sq ft temporary housing a welcome upgrade for some low-income Hong Kong families
Although Hong Kong is mired in recession, the impact of the pandemic on the city’s rich appears limited. The overwhelming take-up at the New Territories project is evidence of this, with some investors buying multiple units.
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