Property

The competition behind opposite trends in property prices

 Opposite trends in property prices

Singapore and Hong Kong have always been called “twin cities”, and have long been competing in the economy as well. In the past decade, Singapore has been vigorously developing tourism, building monumental landmark skyscrapers on Sentosa Island, attracting internationally renowned gaming groups. While attracting many Chinese gamblers, it has boosted the economy of this small island state. The Singaporean national income has outpaced Hong Kong tremendously leaving Hongkongers envious.

As the economy experiences a downturn, so does the property market. In fact, the Singaporean property market was inundated and the government interference cooled it down. The measures proved effective, as property prices have been declining for ten consecutive quarters until now. In the meantime, Hong Kong property prices are at a record high despite stringent policies. The economic performance of the two cities have been running in opposite directions, and the cause is worth examining.

In fact, there is another reason why Singaporean property prices have successfully gone back down, and it is not worth envying at all. From what I understand, ever since China successfully completed the construction of oil pipeline in Kyaukpyu port, Myanmar, oil transportation to China via Singapore has been gradually decreasing. Meanwhile, China and Malaysia are co-developing the neighboring Melaka Gateway, whose completion, according to experts, would very likely challenge Singapore’s position as the largest regional port.

Singapore has been controlling the Malacca straits in the past and could cut off Chinese energy and cargo supply at any time. However, recent obvious changes in Singaporean political attitude prompted China to take precautions to further disperse risk. It was said that canals will be built in Kra Isthmus, Thailand. Besides lowering transportation costs and shortening the distance, it would completely eliminate the Malacca risks. Therefore, as the geological importance of Singapore decreases, the investment value of Singaporean properties will fall accordingly. Earlier some time, an operating Singaporean mall came to Hong Kong for divestment. From an investor’s point of view, since the future of Singapore seems gloomy, why shouldn’t they cash out? And if divestment turns out to be popular, more are expected to come. On the contrary, as the Guangdong-Hong Kong-Macao Big Bay Area is being built, Hong Kong can strive to become a city for international exchange, connecting the Belt and Road Initiative. Once the Hong Kong-Zhuhai-Macau Bridge is completed, with a bit of effort, Hong Kong would no doubt experience an economy growth. Furthermore, with new faces of business executives continuing to join the Big Bay Area, the demand for Hong Kong properties is bound to rise.

Therefore, the Chief Executive’s Property Policy should not only continue to fill in the cumulative gap between demand and supply but also care for the younger generation, such as providing public rental housing, Green Form Subsidized Home Ownership Pilot Scheme and affordable housing for first-time homebuyers in the “sandwich class”, to give priority to the occupancy needs of people from different social class. Public demand towards the government should be more practical. After all, if there isn’t even enough place for people to live, how could a perfect living environment be possible? 

 

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