Concrete Analysis | Here’s how Hong Kong property would benefit from Greater Bay Area
- The city is in the middle of an economy larger than the combined one for Russia, Australia, Mexico, Indonesia and Switzerland
- Area’s tech ambition will also boost Hong Kong’s IPO market
For anyone fretting over the recent blips and spikes in Hong Kong’s stock and property markets, there’s good news on the horizon: the Greater Bay Area (GBA) is coming, if it’s not already here.
The GBA concept is one of the most exciting for Hong Kong property to come down the pipe in a long while, and there’s no reason for anyone with a positive view of the GBA not to have a positive view of Hong Kong’s real estate in the coming months and years.
For better or for worse, China’s plan to amalgamate Macau and nine other cities in southern Guangdong province, including Zhuhai, Huizhou and Dongguan, with greater connectivity on all levels with Hong Kong makes smart economic sense in light of the global trend towards city clusters – previously called megacities.
The Tokyo Bay area is home to 44 million people with a gross domestic product of over US$1.8 trillion. The New York Bay area has 20 million people generating US$1.6 trillion. Then there’s the Bay Area around San Francisco as well as other city clusters that are now crucial economic hubs: Frankfurt Rhine-Main, the UK’s Northern Powerhouse and its Midlands Engine spring to mind.
The GBA, by comparison, arguably has the most mind-boggling numbers: 68 million people with a US$1.4 trillion economy that has just started its interconnectivity.
Need more numbers? When the 26km Hong Kong section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link that terminates at West Kowloon opened for business, it carried 84,000 passengers into Hong Kong on its first two days, and it is the first link in a chain that will connect over 80 per cent of China’s major cities by 2025. The GBA is China’s most productive hub, generating 12 per cent of its GDP with its strongest growth rate at 7.7 per cent to 2017. It also has an economy bigger than Russia, Australia, Mexico, Indonesia and Switzerland. Hong Kong is in the middle of this.
Given those kinds of figures, there’s no way Hong Kong’s property markets won’t benefit from this.
