Mainland Chinese investors flood Hong Kong property market. Here’s why
Following the removal of additional stamp duties on foreign buyers, mainland Chinese investors are flocking to Hong Kong’s property market, marking a significant shift after a prolonged period of subdued activity.
Reports from property agents and developers indicate that mainland Chinese buyers now represent a substantial portion, accounting for up to a third of new property sales in the city.
This surge comes amidst uncertainties in China’s housing market, including a debt crisis and economic instability.
Estimates by realtors suggest that mainland Chinese buyers currently comprise 20 per cent to 30 per cent of new home sales in Hong Kong.
Some investors have been observed purchasing multiple properties at once, with instances of buyers acquiring as many as eight apartments in a single transaction.
The removal of additional stamp duties, coupled with incentives for foreign buyers, has incentivised mainland Chinese investors to capitalise on opportunities in one of the world’s most expensive housing markets.
The decision to eliminate additional stamp duties, which were originally implemented to cool housing prices, follows a period of decline in Hong Kong’s property market.
Housing prices plummeted over 20 per cent from their 2021 peak due to various factors such as higher mortgage rates, talent outflow, and a pessimistic market outlook.
Despite the uptick in sales driven by mainland Chinese buyers, prices remain suppressed as developers offer discounts to reduce inventory.
Analysts project only a moderate recovery in transaction volumes for the year, citing persistent high interest rates.
Research by realtor Midland Realty reveals that the share of purchases by mainland Chinese buyers surged to a record high of 17 per cent in the fourth quarter of the previous year.
This trend has further intensified, with mainland Chinese investors representing approximately 30 per cent of transactions in the primary market, as reported by Midland.
The increased interest coincides with efforts by the Hong Kong government to attract talent by waiving additional stamp duties for foreign buyers who meet certain residency criteria.
Mainland Chinese professionals planning to relocate to Hong Kong are actively participating in the property market, indicating sustained interest in the city’s real estate offerings.
Wheelock Properties and MTR Corp noted that around 20 per cent of potential buyers expressed intentions to purchase properties in their recent launch.
Additionally, some mainland Chinese buyers have demonstrated a propensity for bulk purchases, with instances of individuals acquiring multiple apartments within single developments.
Property agents highlight a growing interest from buyers in Shenzhen, a neighbouring city and business hub of Hong Kong.
Alan Cheng, CEO of southern China at Centaline Property Agency, disclosed receiving over 1,500 inquiries from Shenzhen regarding Hong Kong properties in recent weeks.
Cheng emphasised the newfound enthusiasm among clients who previously showed little interest in Hong Kong, citing positive market sentiment and investment potential as driving factors.
Developers, including CK Asset and New World Development, have announced plans to intensify marketing efforts targeting mainland Chinese buyers.
The influx of mainland Chinese investors signals a transformative period for Hong Kong’s property market, with increased transaction volumes and heightened competition expected to shape the landscape in the coming months.
