From luxury Singapore apartments to Malaysian seafront condos, Hong Kong investors are shifting cash into Southeast Asian property, demoralized by pro-democracy protests in the territory and US-China trade issues.
Property stocks in one of the world’s most expensive housing markets have plummeted since June, with developers being forced to offer discounts on new projects and cutting office rent.
Hong Kong businessman Peter Ng bought a condominium on the Malaysian island of Penang — which has a substantial ethnic Chinese population and is popular among Hong Kongers — after the protests began.
“The instability was a catalyst for me,” the 48-year-old stock market and property investor told reporters, adding that he was worried about long-term damage to the Hong Kong economy if the unrest persists.
“Investors will always look at things like that, political stability,” he said.
Derek Lee, a Hong Kong businessman who owns an apartment in Penang, said that he knew others in the Chinese territory who were considering investing in Southeast Asian property because of the unrest.
“People are thinking about how to quicken their ideas, how to make a more stable life,” the 55-year-old told reporters.
Adding to the allure of Malaysia is its relative affordability and prices much lower than Hong Kong.
The Malaysia site of Southeast Asian real-estate platform Property Guru has seen a 35 percent increase in visits from Hong Kong, Property Guru chief executive officer Hari Krishnan said.
While Hong Kong’s protests are primarily pushing for greater democratic freedoms and police accountability, they have been fueled by years of simmering anger toward Beijing and the Hong Kong government over falling living standards and the high costs of living.
Hong Kong’s property market is one of least affordable in the world, with sky-high prices fueled, in part, by wealthy mainlanders snapping up investments in a city that has for years failed to build enough homes to meet demand.
However, mainland Chinese, who traditionally viewed property in Hong Kong as a safe investment, are now opting for rival financial hub Singapore as a result of the protests and the US-China trade dispute, according to observers.
There has been a jump this year in sales of luxury apartments in the city-state — which like Hong Kong is known for pricey property — driven partially by mainland Chinese buyers, consultancy OrangeTee & Tie said.
“The protests in Hong Kong have made some of the [mainland Chinese] based there ... [more concerned] about investing in Hong Kong real estate, so they carry that investment to Singapore,” said Alan Cheong (張國榮), executive director of the research and consultancy team at Savills Singapore Pte Ltd.
As well as hitting China’s economy, trade tensions might have discouraged some Chinese from investing in the West and pushed them toward Singapore, with its mostly ethnic Chinese population.
“I think they don’t want to go to the West,” Cheong said.
Singapore is “the closest country culturally to China other than Hong Kong, and I think they feel more comfortable with that,” he said.
There are further signs the stable, tightly ruled city is benefiting from the Hong Kong turmoil — Goldman Sachs Group Inc last week estimated that as much as US$4 billion flowed out of Hong Kong to Singapore this summer.
Analysts warned that there was little hope of Hong Kong’s property market recovering soon.
“Hong Kong property share prices have corrected by about 15 to 25 percent since July,” said Raymond Cheng (鄭懷武), head of Hong Kong and China property at CGS-CIMB Securities International Pte Ltd (銀河-聯昌證券).
Residential sales were still holding up, but only when developers offered discounts, office rents were expected to fall by as much as 5 percent and shop rents were also badly affected, he said.
NOTABLE SHIFT: By 2030, 50% of all laptops would be assembled in Southeast Asia, while Taiwan would still mostly focus on research and development, a report said Global laptop and desktop computer supply chains are expected to shift significantly away from China in the next 10 years, a Market Intelligence & Consulting Institute (MIC, 產業情報研究所) report said. By 2030, only 40 percent of global laptop production would remain in China, said the report, which was released on Thursday. “The reshuffling of the global supply chain will be one of the most important trends in the next 10 years,” the institute said in the report. “In the long run, key component makers will follow laptop assemblers in moving out of China.” The Taipei-based institute predicted most key component makers
Merck Group Taiwan yesterday said that it plans to invest substantially on expanding its fab in Kaohsiung’s Lujhu District (路竹) to better serve its local customers, including Taiwan Semiconductor Manufacturing Co (TSMC, 台積電). The company said it plans to expand its production space by 50 percent in the next five years and its workforce by about 40 percent, Merck Group Taiwan managing director Dick Hsieh (謝志宏) told a media briefing in Taipei. Hsieh declined to disclose investment details, but said that the latest investment would exceed the total amount Merck has invested in Taiwan over the past few years. Those investments would be
INVEST IN TAIWAN: A metal components casting firm and the world’s largest maker of aluminum bicycle rims also obtained approvals to join the program Solar Applied Materials Technology Co (SOLAR, 光洋應用材料), a part of Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) “green supply chain,” has pledged to invest NT$1 billion (US$34.1 million) to build a new plant at the Tainan Technology Industrial Park (台南科技工業區), the Ministry of Economic Affairs said yesterday. SOLAR has been collaborating with TSMC to extract precious metals from waste and reuse them as “sputtering target” material in high-end semiconductor manufacturing, a TSMC press release issued in May said. Established in 1978, SOLAR also offers key materials and integrated services to customers in the optoelectronics, information and communications technology, petrochemicals and consumer electronics industries,
‘SWARM TECH’: Joint venture FARobot is to develop autonomous mobile robots that would first be deployed in Hon Hai’s factories to optimize production efficiency Hon Hai Precision Industry Co (鴻海精密) and Adlink Technology Inc (凌華科技) have formed a robotic venture that aims to use “swarm technology” to create robots that can communicate with one another on the factory floor to optimize production efficiency. Hon Hai is Apple Inc’s leading iPhone assembler and the world’s largest contract electronics maker, while Adlink supplies industrial computers and Internet of Things solutions. Through a subsidiary, Hyield Venture Capital Co (鴻揚創投), Hon Hai holds a 51 percent stake in autonomous mobile robot (AMR) developer FARobot (法博智能移動), while Adlink owns the remaining 49 percent. Together, the two companies put up NT$200