PROPERTY PRICES UP DESPITE NATURAL DISASTERS

It appears that there is very little correlation between natural disasters and demand for property. Prime example is Hong Kong, where despite annual typhoons and the likes, prices continue its upward trajectory. And despite warnings of the Big One hitting Vancouver and the west coast of the US, prices are still scaling new heights. Asian Property Review discusses this seeming disconnect using the Christchurch post earthquakes as an example.

ea2News that earthquakes had struck Britain for the first time ever in Warwick and Leicester in the United Kingdom on 29th January this year had struck a chord in me and awakened memories of Britain years ago. I had often passed through those two cities on my way from London to Nottingham where my alma mater was. Although only 3.8 in magnitude on the Richter scale, and the United Kingdom does after all has a history of small earthquakes throughout the centuries, a sense of foreboding arose in me. I hope Nottingham is spared. I hope such a‘freak’ earthquake does not become a more frequent occurrence although I am aware that ever since the December 2004 tsunami that devastated parts of Phuket beach and many other places facing the Indian Ocean, the earth’s tectonic plates had shifted.

The earth-shattering tsunami had literally moved the earthquake fault lines resulting in quakes occurring in places which were formerly safe from earthquakes – such as Sabah in Malaysia and even Nepal. Although Nepal is located within the fault, the devastating April 7.8 magnitude quake was totally unexpected because the last one occurred 80 years ago.

Sabah’s quake was explained by the fact that although it is 1,000 kms away from the collision of the tectonic plates, it is still receiving compression forces from the interaction of three main tectonic plates. This explains the many ‘small’ earthquakes experienced by Sabah prior to the Big One in June this year.

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