Hong Kong Industry Group Calls for HK$20 Billion Support Fund to Ease Property Market Stress
Real estate association proposes government buy-in of distressed properties to avert systemic financial risk
A major real estate industry group in Hong Kong is calling on the government to establish a HK$20 billion (approximately US$2.6 billion) fund aimed at investing in distressed property assets to prevent wider financial instability.
The proposal follows growing concern over defaults among smaller developers, falling commercial property values, and elevated credit risk across financial institutions.
According to recent reports, about 73 percent of HSBC’s HK$32 billion commercial real estate loan portfolio in Hong Kong shows signs of elevated risk or impairment, linked to rents that have dropped more than 20% for prime office space since 2022 and vacancy rates reaching record highs.
The industry group warns that without intervention, the stress could spread to lenders, developers, and ultimately disrupt the broader economy.
The proposed fund would enable government backing to purchase or recapitalise troubled properties, stabilise market sentiment, and shore up liquidity for financially strained developers.
Officials have yet to confirm government support or detailed implementation plans, but the call has prompted discussions among regulators and financial stakeholders concerned about cascading risks in Hong Kong’s real estate sector.
The proposal follows growing concern over defaults among smaller developers, falling commercial property values, and elevated credit risk across financial institutions.
According to recent reports, about 73 percent of HSBC’s HK$32 billion commercial real estate loan portfolio in Hong Kong shows signs of elevated risk or impairment, linked to rents that have dropped more than 20% for prime office space since 2022 and vacancy rates reaching record highs.
The industry group warns that without intervention, the stress could spread to lenders, developers, and ultimately disrupt the broader economy.
The proposed fund would enable government backing to purchase or recapitalise troubled properties, stabilise market sentiment, and shore up liquidity for financially strained developers.
Officials have yet to confirm government support or detailed implementation plans, but the call has prompted discussions among regulators and financial stakeholders concerned about cascading risks in Hong Kong’s real estate sector.
