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Hong Kong Proptech & Real Estate

Geographical Influences on Hong Kong Real Estate

Hong Kong is a city where I have familial roots, and I’ve visited many times. Since half of the city is on Hong Kong Island, and the other half is Kowloon, there is very limited space for horizontal expansion. The only choice is usually up, so it’s one of the densest cities in the world.

Throughout the twentieth century, Hong Kong grew into a top tier global city because it was one of the major ports of entry to China. A century and a half of British colonial rule introduced many western elements which remain today. Perhaps capitalism had the greatest influence on its architecture.

While many waterfront cities tend to get more expensive as real estate gets closer to the shore, Hong Kong has the unique dynamic of getting more expensive as buildings go higher up the peak (and further from the shore). Victoria peak has some of the most impressive views of any city skyline in the world, and is also home to some of the most expensive real estate on the planet.

Hong Kong proudly holds the title of city with most skyscrapers. (546 towers over 150 meters.. and counting). It ranks in the top 10 in the world in inequality (using the Gini Coefficient). It’s an expat city and a major Asian business hub. Here’s some fun architectural distinctions:

Hong Kong Culture and Behavior

Hong Kong is more dense than NYC, so it’s mind boggling to me how efficient and clean Hong Kong is in comparison. Hong Kong has narrower roads, yet less traffic. You will rarely see people cross the street when the signal is red, no matter how narrow the road is. And there’s much less car honking.

Side story: I was stuck on a bus on Nathan Rd when another bus up ahead broke down and stopped all traffic for an hour. The road was backed up a quarter mile and not a single car honked the entire time.

There’s less cars on the road because people across the entire wealth spectrum take public transportation, whether it’s the subway, bus, or tram (叮叮!). Which may seem odd, given that HK and NYC have almost the same Gini Coefficient. But if you get a chance to see how clean and on time it is, you’ll understand why it’s the preferred method of transportation.

There’s a common pattern across all these differences. Hong Kong has a much higher baseline level of respect across its population than NYC. Respect for other people, respect for rules, and respect for public spaces. This stems from the local culture. There’s an city-wide understanding that when so many people have to share so little space, everyone has a responsibility to maintain the shared spaces. And this behavior is ingrained in children starting from school. There’s a strong cultural emphasis on social harmony.

Although Hong Kong has one of the highest expat populations in the world (between 4-5%), they have little to no effect on the overall behavior. Because it’s still a very homogenous society. Deviations from the baseline level of respect are heavily frowned upon.

How Culture Affects Hong Kong Real Estate

Hong Kong’s density necessitates redevelopment, and as such, it’s more landlord friendly and less litigious than other cities of its size. Stakeholders on all sides- residents, developers, city officials- all buy into the idea that adding to the building stock relieves housing problems. So there isn’t as much pushback to new development as you would see in NYC.

From an investment standpoint, like any Tier 1 global city, the real estate values generally go up. But Hong Kong is going through a drastic political transformation and losing a lot of its younger, educated workers. It’s a market in flux and the pressure from interest rate hikes have left a lot of investors and developers in standby.

Hong Kong’s Proptech Scene

Hong Kong is a city of extremes and its proptech scene is no exception. The land and buildings are mostly owned by four conglomerates and the city government. And these conglomerates are rich enough to develop their own in-house solutions. So proptech founders struggle with the limited options in their customer base.

And yet, Hong Kong has no fewer than FOUR proptech associations. When you factor in its proximity to ShenZhen and the greater bay area, it has one of the world’s more active proptech communities.

Proptech Institute

Asia Proptech

Hong Kong Proptech Association

Hong Kong Proptech Alliance

List of Proptech Companies in Hong Kong

Are you a proptech founder in Hong Kong struggling to gain traction? Reach out to me and gain from my global perspective. One of the hard truths I teach founders is that you are not the only one in the world doing what you do. But your competitors don’t necessarily have the capability or even care to expand to your market. I can advise you on their best practices.

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