Divorce Is Pushing Hong Kong's House Prices Even Higher

Hong Kongers' matrimonial woes matter for property prices
  • Hong Kong residents increasingly seek new partners in China
  • Divorce surge adds pressure to lower end of housing market

Residential buildings stand in the Choi Hung, front, and the Tseung Kwan O district, back, of Hong Kong, China, on Tuesday, Aug. 25, 2015. Prices of existing homes have risen 9 percent this year in Hong Kong, according to Centaline Property Agency Ltd.

Photographer: Justin Chin/Bloomberg

The usual suspects for Hong Kong’s sky-high property prices are low interest rates, a housing shortage and demand from mainland China. But there’s another unforeseen factor: divorce.

Demand for separations and remarriages have accelerated sharply over the past two decades as the former British colony has deepened its integration with the mainland. That’s according to Richard Wong, an academic at the University of Hong Kong and a veteran analyst of the local housing sector.

The numbers tell the story: Between 1976 and 1995, cumulative total marriages reached 803,072, with 84,788 divorces and 65,794 remarriages, according to Wong. In the subsequent years, through 2015, marriages rose to 878,552 while divorces shot up to 323,298 and remarriages came in at 256,066.


Looser travel restrictions between Hong Kong and the mainland after Britain handed the colony back in 1997 have played a role in encouraging Hong Kong residents to find new partners across the border. The divorce phenomenon is distinct from the mainland, where couples have sometimes separated simply to get around curbs on housing purchases.

Hong Kong’s housing planners didn’t anticipate the wave of break-ups, according to Wong. The cumulative gross number of new domestic housing units built between 1976 and 1995 reached 1,267,335. In the 19 years afterwards that number dropped to 857,378.

The divorce phenomenon is feeding into a market frenzy that the Hong Kong government has found increasingly tricky to manage. As mortgage lending booms and prices reach records, a mix of rising interest rates, frothy property valuations and the potential for a market collapse are frequently flagged as one of the biggest risks to the economy.

In cases of marriage break ups, both members of a former couple can end up on waiting lists for public housing, with private homes proving unattainable. Households need 18 years of median income to buy a home, more than anywhere else in the world, data from Demographia shows. That compares with just over 12 years in Sydney, eight-and-a-half years in London and under six years for the wider New York metropolitan area.

In some cases, both people may end up finding new partners from the other side of the border. While the trend is dominated by Hong Kong men, women are also looking further afield, he said. "Increasingly women are also searching for spouses across the border."

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