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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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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.
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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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