Hong Kong's Housing Market Looks Like It's Avoided a Bust
- Hang Seng Properties Index has climbed 18% from January low
- Developer rallies typically foreshadow real estate prices
Pedestrians walk past residential buildings illuminated at night in the Tung Chung area of Hong Kong, China, on Wednesday, Feb. 3, 2016. Hong Kong is seeing negative-equity mortgages for the first time since September 2014.
Photographer: Billy H.C. Kwok/BloombergHong Kong homeowners could be forgiven for fearing the worst. In a city notorious for its real estate booms and busts -- including a 70 percent tumble triggered by Asia’s financial crisis in the late 1990s -- property prices are once again sliding from all-time highs.
Yet there’s little reason to worry that the latest slump will spiral into another crash, if shares of Hong Kong’s biggest developers are anything to go by. After a 34 percent selloff from its June peak through Jan. 21, the Hang Seng Properties Index has jumped 18 percent in just two months -- outpacing the broader Hong Kong equity market by almost 7 percentage points.