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Friday, Oct 02, 2026

JPMorgan Says Hong Kong House Prices Could Slide 30% in Worst-Case Scenario

JPMorgan Says Hong Kong House Prices Could Slide 30% in Worst-Case Scenario

JPMorgan Chase & Co. has landed on six property stocks that can best weather the Hong Kong turmoil after applying a worst-case scenario that envisages home prices plunging 30%, retail sales falling by a similar amount and prime office rents sinking 40%.

While a worst-case scenario may seem a rather grim starting point, analysts at the New York-based investment bank said in a report earlier this week that’s what most investors are starting to factor in considering the uncertainties in the former British colony.

They include a re-escalation of the U.S.-China trade war and the social unrest in Hong Kong, both of which will impact upon the city’s status as an international financial center, JPMorgan said.

Against that backdrop, just six companies make JPMorgan’s overweight list -- CK Asset Holdings Ltd., Henderson Land Development Co., New World Development Co., Wharf Holdings Ltd., Hang Lung Properties Ltd. and Link REIT.

“The primary objective of our worst-case analysis is to identify stocks that are still good for investment even under this sort of scenario,” analysts led by Cusson Leung wrote, adding such assumptions weren’t their base case.

JPMorgan said CK Asset has been diversifying away from property in Hong Kong and China. Henderson Land, meanwhile, has done a good job ramping up asset disposals and “strong dividend growth will support strong share price performance.”

Wharf and Hang Lung have promising shopping malls after some tenant reshuffling, while New World, the only developer of the six with a residential angle, should see the most substantial increase in rents.

“We believe the only type of residential projects which are still selling well is the mass market product, of which New World will have a 3,000-unit to be launched in Tai Wai early 2020,” the Sept. 2 report said.

On the flip side, four stocks were downgraded to underweight, and two to neutral.


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