Is major trouble brewing for Hong Kong’s housing market? Not so fast
S&P Global Ratings has warned of potential risks in Hong Kong's property market, citing concerns such as a "credit squeeze" and "negative feedback loop," reminiscent of the language used during China Evergrande's collapse. The agency suggests that a faltering recovery in the housing market, coupled with high US interest rates and supply-demand imbalances, could strain developers, particularly those with limited liquidity.
The financial difficulties of New World Development (NWD), a major Hong Kong developer, have heightened these concerns, with the company seeking loan postponements and pledging substantial assets for refinancing. While NWD's situation may be unique, S&P highlights that other unrated developers also face liquidity challenges. Rising distress is also evident in Hong Kong's commercial real estate sector, with a significant portion of recent investment transactions involving assets sold under receivership or at a loss, and commercial property prices experiencing a sharp decline compared to other major cities.
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S&P Global Ratings has warned of potential risks in Hong Kong's property market, citing concerns such as a "credit squeeze" and "negative feedback loop," reminiscent of the language used during China Evergrande's collapse. The agency suggests that a faltering recovery in the housing market, coupled with high US interest rates and supply-demand imbalances, could strain developers, particularly those with limited liquidity.
The financial difficulties of New World Development (NWD), a major Hong Kong developer, have heightened these concerns, with the company seeking loan postponements and pledging substantial assets for refinancing. While NWD's situation may be unique, S&P highlights that other unrated developers also face liquidity challenges. Rising distress is also evident in Hong Kong's commercial real estate sector, with a significant portion of recent investment transactions involving assets sold under receivership or at a loss, and commercial property prices experiencing a sharp decline compared to other major cities.
via SCMP Full Text Feed
