What price clean air?
What has all this got to do with property you may ask? Well, one of the reasons why I moved away from Hong Kong in the 1990s was because of its worsening air pollution. My departure has barely made a nano-dent in the territory's demography, because vast numbers of Chinse have moved into Hong Kong since I left, pushing up its population by about a million, so this means pollution has not stopped Hong Kong from continuing to expand and this has provided knock-on benefits for its economy and the value of its clearly much sought-after homes. However, many more individuals may leave Hong Kong in future and this could have an impact on its housing market.
As Hong Kong University's research shows, the cost of treating pollution-related diseases and the loss of productivity has drained HKD18 billion (GBP1.5 billion) from the Hong Kong economy so far this year. And the problem is worsening. As the costs to people's health and businesses mount up, so a tipping point will be reached where more non-Chinese leave Hong Kong for a place where they can breathe, and reduced numbers will want to move there. That will have a negative affect on the territory's economy and that, plus the direct affects of reduced housing demand, will have a negative affect on its property market, especially at the upper end which overseas corporates favour for accommodating expatriate staff.
Admittedly, we could be talking decades, certainly years, but if current trends continue then this will surely happen eventually. Another caveat, Chinese immigration, which forms the vast bulk of people moving into Hong Kong, is unlikely to be affected, because they come from a place that is no less polluted. And yes, Chinesification could fill the gap left by departing expatriates, but Hong Kong is a trading city that depends on its oversess links. What's more, many of those Chinese and Hong Kong residents who can afford to leave will do so.
What may happen in Hong Kong could be replicated in other locations across the world, wherever air pollution, rising water levels, extreme weather and other environmental disasters become overwhelming. And while those locations suffer population loss and economic decline, the safe havens where people move to will see increased pressure on housing stock. If not enough homes are built to keep up with the demand from incomers in these locations, then sales prices and rents will rise. Of course, if the world's environmental problems are sorted out then none of this may happen.....
In Rio the politicians
are discussing how to save the planet. In Hong Kong a friend has
posted a facebook status update which shows in graphic detail how our
survival on this planet is threatened. It gives a link to a
University of Hong Kong website
http://hedleyindex.sph.hku.hk/home.php
which shows smog in Hong Kong today (June 20th) at levels
the World Health Organisation considers “Very Dangerous” owing to northerly winds blowing China's industrial air pollutants
southward. Four Hong Kong people will die today because of this
pollution the university's School of Public Health forecasts. Air
pollution in Hong Kong has exceeded safe levels for 139 out of 171
days so far this year.
What has all this got to do with property you may ask? Well, one of the reasons why I moved away from Hong Kong in the 1990s was because of its worsening air pollution. My departure has barely made a nano-dent in the territory's demography, because vast numbers of Chinse have moved into Hong Kong since I left, pushing up its population by about a million, so this means pollution has not stopped Hong Kong from continuing to expand and this has provided knock-on benefits for its economy and the value of its clearly much sought-after homes. However, many more individuals may leave Hong Kong in future and this could have an impact on its housing market.
As Hong Kong University's research shows, the cost of treating pollution-related diseases and the loss of productivity has drained HKD18 billion (GBP1.5 billion) from the Hong Kong economy so far this year. And the problem is worsening. As the costs to people's health and businesses mount up, so a tipping point will be reached where more non-Chinese leave Hong Kong for a place where they can breathe, and reduced numbers will want to move there. That will have a negative affect on the territory's economy and that, plus the direct affects of reduced housing demand, will have a negative affect on its property market, especially at the upper end which overseas corporates favour for accommodating expatriate staff.
Admittedly, we could be talking decades, certainly years, but if current trends continue then this will surely happen eventually. Another caveat, Chinese immigration, which forms the vast bulk of people moving into Hong Kong, is unlikely to be affected, because they come from a place that is no less polluted. And yes, Chinesification could fill the gap left by departing expatriates, but Hong Kong is a trading city that depends on its oversess links. What's more, many of those Chinese and Hong Kong residents who can afford to leave will do so.
What may happen in Hong Kong could be replicated in other locations across the world, wherever air pollution, rising water levels, extreme weather and other environmental disasters become overwhelming. And while those locations suffer population loss and economic decline, the safe havens where people move to will see increased pressure on housing stock. If not enough homes are built to keep up with the demand from incomers in these locations, then sales prices and rents will rise. Of course, if the world's environmental problems are sorted out then none of this may happen.....
