The ongoing conflict in the Middle East should have limited impact on Hong Kong's overall economy due to the region's "insignificant" direct investment, according to a property tycoon.

Far East Consortium chairman David Chiu added that there would not be much capital flowing out of the Middle East due to the conservative approach by wealthy families.

Continued strikes by the United States and Israel on Iran -- coupled with Tehran's retaliatory attacks -- disrupted global supply chains and upended the world's energy and transport sectors.

Chiu, a Chinese People's Political Consultative Conference Standing Committee member, is currently in Beijing to attend the Two Sessions meetings.

In an exclusive interview with RTHK, he spoke on a wide range of issues.

"When it comes to investing in Hong Kong – direct investment [from the Middle East] – today is absolutely insignificant, and therefore, it won't affect our economy at all," he said.

"But of course, on the macro-economy side, because of the war, interest rates may not come down as rapidly as we all want, oil prices may go up further.

"I don't think we should expect, especially now [with] the war situation, too much money will come into Hong Kong for the time being."

The businessman also gave a bright outlook of Hong Kong's housing market, saying he would "boldly predict" prices to rise by over 15 percent this year and the next.

However, Chiu had reservations on Financial Secretary Paul Chan's decision to raise stamp duty for luxury home transactions valued at HK$100 million or more to up to 6.5 percent.

"I personally think that it's a little bit too early," he said, explaining that developers rely on both buyers at home and abroad to recoup their investment.

"Especially now, we need a lot of money to develop our Northern Metropolis, and that releases a lot of new investment for the developers. And the developers would not be able to invest a lot of money, unless they can release some of the inventory."

Chiu, who's "very bullish" of the Northern Metropolis development, revealed his company is in the "final stage of negotiation" with authorities on land premium regarding a land parcel in the area.

"We have a piece of land, which will... allow us to build about 600,000 square feet of residential [buildings], amounting to close to 900 units, next to the Hung Shui Kiu light rail station."

Under a 2024 pilot scheme, the government will award plots of land in the Northern Metropolis to winning bidders for collective development.

In submitting a bid, firms must also tender for a site reserved for technology development.

To that, Chiu said it is a "new territory" for developers as they have to look for partners in the tendering process.



Edited by Raymond Yeung