Over 50% Of HK’s Commercial Bldgs At Risk Of Higher Sea Levels
HONG KONG – The Guangdong–Hong Kong–Macao Greater Bay Area (GBA) is vulnerable to extreme weather events arising from climate change, particularly Hong Kong, reported the South China Morning Post (SCMP) on Wednesday morning (7 September, SGT).
In fact, a recent report by China Water Risk showed that 23 percent of the residential buildings and 55 percent of the commercial buildings in Hong Kong would be at risk if sea levels increase by 2 metres come 2100. The group also estimated that should this happen, it would impact 82 percent of the Hong Kong government’s overall revenues.
Meanwhile, the Organisation for Economic Co-operation and Development (OECD) said Guangzhou and Shenzhen are among the top 20 cities globally that are most at risk of flood losses by 2050.
“As the GBA grows and develops, regional hazards such as storms, flooding, sea-level rise, extreme heat, and drought continue to worsen and become more frequent in the region as a result of climate change,” said the Urban Land Institute (ULI), which is urging property stakeholders in the GBA to create a “Climate Resilience Coalition” to have a coordinated approach against climate change-related risks and mitigation.
“Left unchecked, climate change will continue to increase the number and size of damage claims against insurance policies, cause defaults on loans, and jeopardise real estate value across the GBA,” it explained.
Moreover, a stress test by Hong Kong’s central bank in January discovered that 28 percent of 27 banks’ lending in the Chinese territory were exposed to climate risks. The Hong Kong Monetary Authority (HKMA) studied HK$2.9 trillion (US$370.6 billion) worth of property-backed loans. Of this, about 50 percent were residential property loans, while 33 percent of the assets used as collateral are situated in coastal or low-lying places.
However, the majority of real estate developers interviewed by HKMA were less concerned about their projects’ 20- to 30-year prospects because of their “relatively short holding periods” of 5 to 10 years.