The perfect storm for the global economy is coming

Damon Ho

29/3/2025

From the end of March to early of April, the prices and volumes of commercial buildings continue to fall. Property investors who have overborrowed are now at deep risk. The pressure on banks to call loans has been increasing to an elevated level. It is normal that the properties held by investors are sold in batches at half price. It is obvious that the doomsday for insolvent investors is not far away.

Recently, there has been endless news about investors selling their investment properties at ultra-low prices. This situation just shows that lending banks have been exerting intense pressure on borrowers, and those over-optimistic borrowers can no longer use delaying tactic to sell off assets to repay their installment. Indeed, a certain number of debt-ridden investors adopt attitude of “lie flat” to confront the high-pressure calling loans from banks. Obviously, the lending banks' tolerance for these investors has reached the pivotal point.

Since the price per square foot of shops is falling deeper and deeper, the chance of a remarkable rebound in price and volume in the short term is extremely low. As many investors will be bankrupt, it is inevitable that banks' bad debts will soar to record high.

On the other side, U.S. President Donald Trump will impose a 25% tariff on imported cars from all over the world on April 2. Thus, global consumer confidence will be further dampened. The stock market will inevitably fall again. Sales volume in the first and second-hand property markets will also be dragged down. A global economic downturn is about to happen.

In the past two years, the property markets in China, Hong Kong, Canada, and the United Kingdom have been continuing to decline. With the tariffs war intensifying this year, there is a high chance that property prices will fall further. After the mid of this year, a number of well- known property investors will be bankrupted one by one, and the investment sentiment will be further damaged. In general, the investment environment will confront an unmanageable torrent this year.

I want to leave a message

Nickname

Message

Captcha

Member Login

1. Hk bankcould managecommercial bad loan 2025-03-29 16:33:45

Hong Kong banks'profits and asset quality should be able to manage higher property-related bad loans and commercial real estate strains, reports S&P Global Ratings.

"Hong Kong banks, particularly the largest ones, have diversified loan portfolios, adequate collateral, and reasonable underwriting standards," said S&P Global Ratings credit analyst Ryan Tsang.

However, small and midsize banks are likely to experience greater strain due to their higher exposure to commercial property loans and, potentially, to smaller and leveraged developers and investors, Tsang warned.

2. Gov has dismissed S&P’s claim for supply 2025-03-30 11:37:46

The government has dismissed S&P’s claim that the city has an oversupply of residential properties, stating that demand remains strong.

It pointed to a private housing vacancy rate of 4.5% at the end of 2024—consistent with the 20-year average—and rising rental prices.

The government expects the market to remain stable in 2025, supported by lower interest rates, economic growth, and an inflow of talent.

Property lending totaled $3.4t at the end of 2024, with residential mortgages making up 56% and commercial property loans 44%. Mortgage delinquency stood at 0.12% as of January 2025, whilst negative equity cases remained low at 0.15%.

3. Kai Tak Park inexperienced handle bid crowd 2025-03-31 12:39:51

Kai Tak Sports Park will "learn a good lesson" from hosting the Hong Kong Sevens and be better prepared in the future following complaints by fans over their inability to get food at the venue, a business tycoon said on Monday.

Some rugby fans had complained over the dearth of food at Kai Tak Stadium, where the three-day tournament was held, after the government had told operators to enhance their food supply services.

"They're inexperienced at handling a crowd that big and I think they will learn a good lesson," said Lan Kwai Fong Group chairman Allan Zeman on RTHK's Backchat programme.

4. Retail sales in February reached $29.4b 2025-04-01 16:03:12

The value of retail sales in February reached $29.4b, which was down 13% from the same period last year, the Census & Statistics Department said.

According to the government, this was partly due to the earlier arrival of Lunar New Year in late January this year as compared to early-February last year.

For the first two months of 2025, the value of total retail sales decreased 7.8% year-on-year, whilst the value of online retail sales dropped 2.4% from last year.

Online sales accounted for 7.8% of the total retail sales value in February. Provisionally estimated at $2.3b, the value of this segment dropped 7.3% from a year earlier.

‹ Back