Coronavirus, economic slump force mainland Chinese owners to dump their luxury Hong Kong properties at steep losses

At least 10 recent transactions were lower than market price or incurred losses of as much as HK$8.2 million (US$1.06 million) for their mainland owners

China’s economic slowdown and the third wave of Covid-19 infections in Hong Kong have made some mainlanders offload the properties, analysts say

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Mainland Chinese buyers are shying away from real estate in Hong Kong as the coronavirus pandemic clouds the economic outlook and keeps investors from travelling to the city. Photo: AFP

Published: 8:30am, 19 Aug 2020Updated: 11:30am, 19 Aug 2020

Some heavily indebted mainland Chinese owners have been forced to sell their luxury apartments in Hong Kong at huge losses or discounts, as the economic slump at home takes a toll and a fresh wave of coronavirus makes them question the wisdom of holding on to the assets in the city.

At least 10 transactions – nine residential properties and one parking space – have incurred big losses, of up to HK$8.2 million (US$1.06 million), or been sold with steep discounts since the second half of July, according to agents.

“The economies in both mainland China and Hong Kong are so-so during the pandemic, causing some mainland buyers to sell their properties at lower prices and losses, because they need cash,” said Derek Chan, head of research at Ricacorp Properties.

China’s economy grew 3.2 per cent in the second quarter, making it the first major economy in the world to record some sort of recovery from Covid-19. But Chinese enterprises are bracing for sluggish external demand as many other countries are still embroiled in a prolonged pandemic, a problem exacerbated by the fraying US-China relations.

The retreat from the local property market has continued since early signs emerged in April, with several spots popular with mainland investors suffering bigger price declines. Mainland buyers have generally halted their purchases, according to some property agencies.

The discounts and losses of mainland Chinese homeowners reflected the general market situation in Hong Kong, said Sammy Po, chief executive of Midland Realty’s residential division, as sellers in the secondary market are under pressure to cut prices for fast sales.

“Developers are willing to sell their properties,” said Po. “Some offer new units with a price lower than the market price, and they are doing various promotions to attract buyers. So used-home sellers need to compete with developers” for buyers, he added.

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