The Sino-US decoupling will massively push down assets value

The U.S. stock market, which had been falling recently, rebounded sharply after President Donald Trump canceled the reciprocal tariffs. However, China retaliated against Trump's tariffs policies, causing the U.S. tariffs on China goods to increase to 145%. Since then, the mutual additional tariffs on goods between China and the United States have had a far-reaching and extremely adverse impact on the stock and property market. 

The Hang Seng Index, along with the Dow Jones Industrial Average had declined previously. On the other hand, the property market sentiment keeps incredibly quiet. Developers have delayed the launch of new projects for fear of unwelcoming sales results. After Trump announced on Thursday that he would postpone the imposition of reciprocal tariffs on different countries for 90 days, Sun Hung Kai Properties declared that it will announce the price list of its Sierra Sea residential project on Sai Sha, Sai Kung, next Wednesday on April 16. 

This Sai Kung project of Sun Hung Kai Properties is located in a remote area of New Territory and the sales price per square foot of the first batch units will likely be under HK$10,000. Its sales records will be an indicator for first-hand properties under the scenario of Sino-US tariffs war. 

With the completed decoupling of Sino-US trade, China's exports to the United States are bound to drop significantly in the next three months. A large number of domestic factories will face the dilemma of closing down or halting regular production. In addition, the Renminbi (China currency) has been continuing to depreciate against the US dollar recently. In this business sentiment, domestic buyers who plan to buy properties in Hong Kong will be hit by the dual negative factors of economic downturn and the depreciation of Renminbi. Indeed, their desire to buy properties in Hong Kong is no doubt to decline, which will have a huge negative impact on domestic customers who account for 30% of new home buyers. 

As China and the United States are completely decoupled, US President Donald Trump will not stop to impose tougher policies against China. As a result, more severe sanctions will continue to emerge. As Hong Kong is fully integrated into the Greater Bay Area, it cannot avoid being affected. Recently, the transaction prices of second-hand housing estates have been falling to a new low position, and the opening prices of new projects will also be forced to reduce. With the vicious price cuts of second-hand and first-hand properties, the probability of housing prices falling by at least 10% before the end of the year has risen to more than 70%.