Chinese mainlanders buy smaller share of new Hong Kong homes
Buyers from across the border account for shrinking percentage of sales, focusing on top end of town as local purchasers return to market
Mainland property buyers, once blamed for pushing up Hong Kong home prices, are accounting for a shrinking share of new home sales as local buyers return to the market.
According to a Centaline Property Agency survey, an estimated 23.1 per cent of the new flats sold in Hong Kong in the third quarter were bought by mainlanders, down from more than 40 per cent a year ago, or a 1.2 percentage point drop compared with the second quarter.
Those purchases by mainland buyers accounted for 31.2 per cent of the total value of new homes sold in the third quarter, down from half a year ago, or a 3.4 percentage point decline quarter on quarter, according to Centaline.
Sino Land sales department associate director Victor Tin Sio-un said mainlanders were still interested in buying property in Hong Kong but focused more on bigger luxury homes.
Tin said one buyer from the mainland just bought four 1,316 sq ft units at Sino Land's Providence Bay development in Tai Po for HK$46 million in total. The buyer bought it as an investment.
"The projects recently launched by developers mainly cater for Hong Kong residents; they are smaller in size and located in the New Territories. Those are not popular choices for mainlanders," he said.
Among those smaller-unit projects is The Reach in Yuen Long, a joint venture by Henderson Land Development and New World Development. The 2,580-unit project is due to be launched soon and about 80 per cent of the flats range in size from 490 square feet to 600 sq ft. "If a project is launched in West Kowloon, I believe [mainlanders] will rush to buy," Tin said.
Centaline said it expected mainlanders to make up an even smaller share of flat buyers this quarter as developers put mid- to small-sized flats up for sale. These flats traditionally are not favoured by mainland buyers, according to the property agency.
Mainland buyers also bought a smaller percentage of homes sold in the secondary market, accounting for 8.6 per cent of third-quarter sales in the sector, a 1.5 percentage point drop from a year ago. The value of those purchases by mainland buyers added up to 10.6 per cent of the sector's total, down 3.8 percentage points year on year.
The prices of secondary market homes have surged about 93 per cent since 2009, according to Centaline's housing index. Wealthy mainland buyers had been blamed for pushing up prices, especially luxury flats. In August, Chief Executive Leung Chun-ying unveiled a plan to set aside Hong Kong properties only for local residents.
Tin said those flats restricted to local buyers would be mass housing units, not the luxury flats favoured by mainland buyers. It would not affect mainlanders' buying interest, he said.