Teargas and water canons did not deter Hong Kong protesters, but the rising tension do chase away wealthy Chinese and the much-needed tourists to the island state, writes WSJ wealth editor Wei Gu in the Wall Street Journal. A quarter of luxury property in Hong Kong is bought by mainland Chinese.
Although comprehensive data is hard to come by, Chinese investors already had begun selling this year amid a liquidity crunch in China, property agents say. The current troubles could intensify this selling, some agents fear, and that could have an impact on prices. Chinese buyers account for a quarter of new luxury home sales, according to Centaline Properties.
The protests could peter out and Chinese are likely to continue to invest—and shop—in the city given its proximity to the mainland, but property agents and wealth managers also say the recent China-fueled boom in prices and growth may be a thing of the past.
Rich Chinese fear pro-democracy protests may force Beijing to tighten its grip on Hong Kong, making it a less safe place to park wealth offshore. Wealth managers said Singapore, another popular offshore wealth center for the Chinese, will likely view the pro-democracy protests as an opportunity to grab business from Hong Kong.
Late Friday, tension between pro-democracy protests and those who oppose the demonstrations simmered in the Mongkok area of Hong Kong. Protesters continued to block the entrance to the chief executive’s office, and some bank branches and luxury shops were forced to close.
The disturbances also will exact a toll on Hong Kong’s retail sector, which relies on demand from mainland visitors.
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