Hong Kong homes in on property

The hankering for bricks and mortar is as strong as ever, Stephen Vines writes from the colony where a modest parking space can cost a cool £60,000

At a time when the long-term future of Hong Kong is said to be in question, it may seem bizarre that more than a hundred well-heeled people should spend a night on the street queuing for the right to spend more than £60,000 on a parking space.

Yet the residents of the colony's middle-class Yau Yat Cheun district were simply doing what most Hong Kong people do - they were thinking about property and making plans to acquire more, even if it was only a space just big enough to house an average-sized car.

In the crazy world of the Hong Kong property market they thought they had spotted a bargain.

The evidence suggests they were right: other parking spaces in the neighbourhood are selling for around £80,000. At one point during the property frenzy, a record £144,000 was paid for a parking-space in another middle-class area.

Talk to practically anyone in Hong Kong and the chances are that they will know the precise price of every square foot of property in their vicinity and most other areas as well. The newspapers may be full of reports about the pending change to Chinese sovereignty but the average person is usually far more interested in scanning the property advertisements.

Prices have been falling, in part because of a government-inspired squeeze on home loans and in part because the market had reached such dizzy heights that the affordability ratio was starting to make no sense at all. It is hard to buy a very modest two-bedroom flat in an outlying area for less than £160,000. Thousands of people recently queued to buy what are considered bargain flats in the biggest of the new towns for more than £400 per square foot: in other words, a tiny 500-square foot flat sold for more than £200,000. Considering that Hong Kong is supposed to be entering a period of deep political uncertainty, the willingness to invest in bricks and mortar might be difficult to fathom. It is the uncertainties, however, that have led so many people to put their faith in property.

Middle-class Hongkongers who have scuttled off to Canada and Australia have returned deeply disillusioned by the falling value of properties bought in haste when they landed overseas. At the other end of the scale, some families of quite modest means gambled on property across the border in China and discovered a nightmare of problems with legal title, building quality and the provision of basic services. The Hong Kong market, on the other hand, looks relatively attractive: prices have risen almost threefold in the past four years and supply shortages are expected to create another boom when the colony reverts to Chinese sovereignty in 1997.

Poorer families club together to secure a toehold in the property market, while richer ones have started to sell more expensive properties so that they can buy smaller ones in Hong Kong and still have money left to invest overseas. Britain is popular with Hong Kong buyers, who see it as a land filled with bargains.

A civil servant explained the obsession with property as part of the immigrant mentality which still prevails. As most people arrived penniless from China, she said, they are anxious to own tangible assets which provide a material expression of their new-found prosperity.

But what if everything goes horribly wrong after 1997? This question seems not to bother most property buyers, who shrug off the memory of 1983, when the last price crash carried a great many people into the bankruptcy courts. Nowadays the banks have better security on their loans, the general level of wealth is higher and there is an unshakeable belief that property is the ultimate investment. Hong Kong's new masters clearly share this belief - Chinese companies have been among the biggest buyers of commercial property in the territory.

Even those most pessimistic about Hong Kong's future wonder whether down- turn in prices is an ideal buying opportunity or a signal to stay out of the market. The gambling instinct is strong and there are few who choose not to take a flutter on a piece of real estate.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
News
i100
Life and Style
food + drinkClue: You'll either love them or you'll hate them
News
Howard Marks has been diagnosed with inoperable cancer, he has announced
people
News
newsIf you're India's Narendra Modi, it seems the answer is a pinstripe suit emblazoned with your own name
News
peopleWarning - contains a lot of swearing
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Tradewind Recruitment: Geography Teacher

£90 - £140 per day: Tradewind Recruitment: On behalf of a successful academy i...

Investigo: Finance Business Partner

£45000 - £50000 per annum: Investigo: My client, a global leader in providing ...

Austen Lloyd: Commercial Property Solicitor - West London

Excellent Salary: Austen Lloyd: WEST LONDON - An excellent new opportunity wit...

Recruitment Genius: Florist Shop Manager

£8 - £10 per hour: Recruitment Genius: A Florist Shop Manager is required to m...

Day In a Page

Syria crisis: Celebrities call on David Cameron to take more refugees as one young mother tells of torture by Assad regime

Celebrities call on David Cameron to take more Syrian refugees

One young mother tells of torture by Assad regime
The enemy within: People who hear voices in their heads are being encouraged to talk back – with promising results

The enemy within

People who hear voices in their heads are being encouraged to talk back
'In Auschwitz you got used to anything'

'In Auschwitz you got used to anything'

Survivors of the Nazi concentration camp remember its horror, 70 years on
Autumn/winter menswear 2015: The uniforms that make up modern life come to the fore

Autumn/winter menswear 2015

The uniforms that make up modern life come to the fore
'I'm gay, and plan to fight military homophobia'

'I'm gay, and plan to fight military homophobia'

Army general planning to come out
Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign

What the six wise men told Tony Blair

Months before the invasion of Iraq in 2003, experts sought to warn the PM about his plans. Here, four of them recall that day
25 years of The Independent on Sunday: The stories, the writers and the changes over the last quarter of a century

25 years of The Independent on Sunday

The stories, the writers and the changes over the last quarter of a century
Homeless Veterans appeal: 'Really caring is a dangerous emotion in this kind of work'

Homeless Veterans appeal

As head of The Soldiers' Charity, Martin Rutledge has to temper compassion with realism. He tells Chris Green how his Army career prepared him
Wu-Tang Clan and The Sexual Objects offer fans a chance to own the only copies of their latest albums

Smash hit go under the hammer

It's nice to pick up a new record once in a while, but the purchasers of two latest releases can go a step further - by buying the only copy
Geeks who rocked the world: Documentary looks back at origins of the computer-games industry

The geeks who rocked the world

A new documentary looks back at origins of the computer-games industry
Belle & Sebastian interview: Stuart Murdoch reveals how the band is taking a new direction

Belle & Sebastian is taking a new direction

Twenty years ago, Belle & Sebastian was a fey indie band from Glasgow. It still is – except today, as prime mover Stuart Murdoch admits, it has a global cult following, from Hollywood to South Korea
America: Land of the free, home of the political dynasty

America: Land of the free, home of the political dynasty

These days in the US things are pretty much stuck where they are, both in politics and society at large, says Rupert Cornwell
A graphic history of US civil rights – in comic book form

A graphic history of US civil rights – in comic book form

A veteran of the Fifties campaigns is inspiring a new generation of activists
Winston Churchill: the enigma of a British hero

Winston Churchill: the enigma of a British hero

A C Benson called him 'a horrid little fellow', George Orwell would have shot him, but what a giant he seems now, says DJ Taylor
Growing mussels: Precious freshwater shellfish are thriving in a unique green project

Growing mussels

Precious freshwater shellfish are thriving in a unique green project