The reopening of the border with mainland China after almost three years of Covid-19 failed to boost Hong Kong’s beleaguered property market as much as had been hoped, according to a report released by JLL on Wednesday.
Hong Kong’s beleaguered property market remains stubbornly stuck in the doldrums, as the much-anticipated border reopening with mainland China has yet to boost home transactions, which bolds ill for owners looking to unload their assets.
The number of homes that changed hands in Hong Kong was 3,051 in January, according to the latest data compiled by JLL, almost a fifth less than the monthly average of 3,755 transactions last year.
Transactions involving buyers from outside Hong Kong were particularly tepid. Just 34 such transactions – signified by payment of Buyer’s Stamp Duty (BSD) – were recorded in January, below last year’s average of 53 and a far cry from pre-pandemic levels.
“The average monthly transaction volume involving BSD was 294 in 2018 and 178 in 2019, so it’s still significantly below the pre-Covid
level,” said Nelson Wong, executive director of research at JLL in Hong Kong.
In 2019, the year before the coronavirus
broke out, mainland Chinese buyers accounted for 8.4 per cent of overall home sales in Hong Kong, according to data compiled by Midland Realty.
But annual transactions involving buyers who were non-permanent residents or non-domiciled companies slumped by about three quarters under the strict travelling restrictions introduced during the pandemic, according to Inland Revenue Department statistics cited by Midland Realty.
The resumption of cross-border travel had been seen by industry watchers as the key to reviving Hong Kong’s weakened property market, which saw residential transactions plummet 39 per cent year on year to 45,050 last year, the lowest level since record-keeping began in 1997.
Hong Kong’s government last month announced it would cut stamp duty for first home buyers to spur demand, the latest in a slew of easing measures aimed at bringing the housing market back to life.
Instead of the anticipated rush of mainlanders across the newly opened border to buy Hong Kong property, the reverse appears to have happened.
Inquiries from Hongkongers looking into property projects in the mainland cities of the Greater Bay Area have shot up. Agents have resumed marketing these developments in Hong Kong, luring buyers to attend home viewing tours in mainland China.
Each tour might draw about 20 to 30 potential buyers from Hong Kong, several agents told the Post.
“We’ve seen enquiries from Hong Kong buyers asking about homes in the Greater Bay Area has surged several-fold from before [the cross-border opening],” said Ted Lam, Midland Realty’s managing director for the Greater Bay Area.
“I had expected an improvement in the market with the resumption of cross-border travel and recovery of the economy, no matter whether it’s the Hong Kong market or the mainland market.”
The Greater Bay Area includes Hong Kong, Macau, and nine mainland cities in Guangdong province: Guangzhou, Shenzhen, Zhuhai, Foshan, Zhongshan, Dongguan, Huizhou, Jiangmen and Zhaoqing.