Hong kong protests to drag overseas demand down?

Photo: Design Boom

The pro-democracy concerns were brushed aside earlie this year by Knight Frank.

Thomas Lam, Senior Director, Head of Valuation & Consultancy at the agency said that "won’t be material impact" and that "buyers are still looking for attractive investment opportunities".

Indeed, according to Savills' latest Sales and Investment report, there were 12,242 residential sales recorded in the first nine months of 2014, the highest total since 2009.

Property prices in Hong Kong in the first half of the year grew 3.7 per cent, though, according to the global agent, 15 per cent lower than the same time in 2013, which prompted some speculation that the market's cooldown could continue thanks to combination of government austerity measures and the unrest.

Now, new figures from Savills show that luxury apartment prices jumped 1.2 per cent from January to September 2014 compared to a 7.3 per cent drop in 2013, suggesting that the market could be rebounding in spite of the protest.

"For now the strong fundamentals of most sectors remain relatively unscathed," says Simon Smith of Savills, referring to investment in offices. But he adds that Occupy "may impact investment sentiment if it is prolonged".

"Throughout 2015, while we expect demand to revive in most sub-markets, the future relationship between Hong Kong and China, as well as how major investors perceive Hong Kong, could become key factors dictating movement in the office market.

"Overseas investors may demand an increased risk premium for Hong Kong if the current disruption worsens, resulting in higher cap rates and lower prices."