Currency Changes and Hawai‘i
Now that China has devalued its currency, what effects could Hawaii feel? Pacific Business News looks at this from a couple of angles; editor in chief A. Kam Napier has more.
First, it’s worth pointing out that the Chinese yuan is hardly the only currency to lose value against the U.S. dollar, nor has it taken the biggest fall. As many Menendez, an international business development expert writes in PBN this week: The Euro has declined 18% and the Japanese yen 22% against the dollar over the past year.
His prediction for Hawaii, in light of the drop in the Yuan’s value is that we’ll most likely feel it in the purchase of luxury goods…as in fewer of them. As he notes, Chinese spending accounts for much as 45% of the global luxury good market, which just got more expensive.
On the real estate front, both Menendez and PBN reporter Dan Moriki note that Chinese investors may take a wait-and-see attitude about Hawaii investment properties… but as Moriki found, currency swings have really changed buying habits of two other countries. The Canadian dollar is down, causing Canadian investors to back off of the Hawaii market. The yen is down too, but it’s having the opposite effect. It has increased Japanese investment in Hawaii real estate. This has to do with the respective health of their home currency. Japanese, fearing the yen will only weaken further, are actually rushing to turn their currency into Hawaii properties.