Mainland Chinese surge into Hong Kong property after stamp duties scrapped
19/03/2024 08:54
By Clare Jim
HONG KONG, March 19 (Reuters) - After a pandemic-induced
lull spanning more than three years, mainland Chinese are
snapping up homes in Hong Kong, accounting for up to a third of
new property sales weeks after the city removed all additional
stamp duties on foreign buyers.
The surge of mainland Chinese buyers into one of the world's
most expensive housing markets - reported by several property
agents and developers - comes amid battered confidence in the
mainland's housing market due to a debt crisis and an uncertain
economic outlook.
Mainland Chinese now account for 20% to 30% of new home
sales, according to estimates by realtors, with some buyers
recently purchasing up to eight apartments at once.
Hong Kong in late February removed all additional stamp
duties, including those for purchases of second properties, as
well as duties on those selling flats within two years of buying
them. Foreigners, who had to pay 15% tax since October, from 30%
previously, now pay around 4.25%, on par with locals.
The reversal of what was deemed an unsuccessful government
push during the 2010s to cool housing prices came after Hong
Kong housing prices plunged more than 20% from their 2021 peak
due to higher mortgage rates, an outflow of talent and a weak
market outlook.
But even though sales have risen, prices remain suppressed
as developers offer discounts to clear inventory. S&P Global
Ratings estimated transaction volumes this year would recover
only moderately from 2023, as interest rates remain high.
Property remains a mainstay of the Hong Kong economy, and
the share of purchases by mainland Chinese climbed to 17%, a
record high, in the fourth quarter of last year, research by
realtor Midland Realty showed.
The increase coincides with a bid by the Hong Kong
government to attract talent by waiving an additional stamp duty
for foreign buyers, unless they fail to gain citizenship after
seven years.
Now, that share has risen further to around 30% in the
primary market, Midland said, based on their internal sales.
At a new launch this month by Wheelock Properties and MTR
Corp 0066.HK , mainland Chinese professionals planning to move
to Hong Kong accounted for around 20% of those who had expressed
an intention to buy, the developer said.
Some mainland Chinese are buying in bulk.
Two weeks ago, major property developer Henderson Land
0012.HK sold all 30 apartments on offer at a launch event,
according to realtor Centaline. Two buyers bought eight
apartments each, and one of them, who spent HK$42 million ($5.4
million) in total, was from mainland China.
In another Henderson development in Kowloon district, a
mainland Chinese buyer bought five apartments totalling HK$25
million, according to media reports.
Developers including CK Asset 1113.HK and New World
Development 0017.HK have also said they would do more
marketing aimed at mainland Chinese.
Buyers in Shenzhen are particularly interested in Hong Kong,
property agents say. The southern city and business hub borders
the city.
Alan Cheng, CEO of southern China of Centaline Property
Agency, said the company had received more than 1,500 enquiries
from Shenzhen about Hong Kong property and completed eight
transactions in the last two weeks.
"We have clients who have never cared about Hong Kong but
are now asking about the threshold and yield for investing in a
property," he said.
"They heard Hong Kong is a good market."
($1 = 7.8210 Hong Kong dollars)
(Reporting by Clare Jim; Editing by Miral Fahmy)
((clare.jim@thomsonreuters.com;))