Hong Kong property-market insiders see signs of mainland China residents returning to the housing market after the reopening of the border, although a full recovery is expected to take months amid high interest rates.
Mainlanders have started to buy homes in Hong Kong again, with interest concentrated in luxury properties so far, Victor Tin, executive director at Sino Land, told the Post.
“Luxury homes are seeing an earlier kick-off,” Tin said. “Later when the border reopening is further relaxed, there may be even more mainland buyers coming, boosting other kinds of properties.”
For example, mainlanders bought three of the six flats sold at St George’s Mansions in Ho Man Tin, a luxury project jointly developed by Sino and CLP Group, in the first 10 days of this year, Tin said. The three flats sold for around HK$300 million (US$38.41 million).
The government’s Quality Migrant Admission Scheme seeks to attract highly skilled or talented people to settle in Hong Kong to enhance the city’s economic competitiveness. While the policy has seen a surge in inquiries, it is unclear to what extent immigration by mainland Chinese people will help the property market.
“Some mainlanders are still interested in investment or relocating to Hong Kong as it is a window of China to the rest of the world, especially with the lure of the Quality Migrant Admission Scheme,” said Andy Lee, CEO of Centaline Property Agency for China. “They may come and buy a home afterwards.”
However, a boom in the short term is unlikely because of the high cost of home purchases and capital transfer, Lee added.
“Neither I nor my family has any plan to buy a home in Hong Kong,” said Effy Chen, 26, an online fashion influencer who is based in Guangzhou and has family businesses in several major cities in China.
“The reasons are straightforward. It is not comfortable for living. Homes in Hong Kong are expensive but the space is too small compared with other big cities in the mainland. It is also not a good choice to pour your money into the real estate sector rather than other sectors amid a gloomy market.”
While the reopening of the China-Hong Kong border is expected to stimulate the Hong Kong economy, rising interest rates will continue to cast a shadow over the mass residential market, according to Dorothy Chow, executive director for valuation and advisory services at Colliers Asia.
“As the economy revives, positive factors in boosting residential prices including stock-market performance, increasing household income and restored investor confidence will hopefully bring the residential market back on the recovery track,” she said. “Whilst further interest rate hikes will continue to weigh on home prices, we foresee an overall 5 to 10 per cent year-on-year downward adjustment in 2023.”