Winning hearts and minds: Greater Bay Area needs to convince it can deliver Hong Kong quality of life
Greater Bay initiative expected to dramatically change the dynamics of Pearl River Delta for Hongkongers
Nicholas Brooke is chairman of Professional Property Services, a specialist real estate consultancy. Brooke is also chairman of the Hong Kong Harbourfront Commission. He discusses how Hong Kong’s real estate could benefit from integration into the “Greater Bay Area”.
What opportunities and challenges will Hong Kong face from the continuing regional integration and collaboration, especially of its real estate sector?
I see two major opportunities. The first is [Beijing’s global strategy] “Belt and Road Initiative”, where companies and consortiums embark on projects where they need advice in connection with due diligence, feasibility, cost, delivery and subsequent management. The second, and I think more exciting, opportunity is the Greater Bay initiative, as a result of the central government’s support and enhanced connectivity. This is going to dramatically change the dynamics of the PRD [Pearl River Delta] region, which will give rise to requirements around planning, transit-led development, sustainable communities, affordable housing and city management. The challenge will be wider choice and competitively priced real estate across all categories,within striking distance of Hong Kong.
As the Hong Kong–Zhuhai–Macau Bridge and the Hong Kong section of the high-speed rail link near completion, what dynamics and opportunities will they bring? Will those priced out of the market be willing to commute from a neighbouring region?
Given the enhanced rail and road links and the porous border, Hong Kong residents will have much wider choicein terms of size and price of residential accommodation. It will be too far for some, but for those with families and the self-employed, to own a house with a garden will be a realistic option. This assumes access to schooling and medical care to a Hong Kong standard and part of the Hong Kong offer should be to help establish such facilities to attract Hong Kong and international talent to reside in the PRD. I think it will be difficult to persuade young professionals to live anywhere but close to their place of work.
The Hong Kong government will encourage retirees or holidaymakers, to live or spend their holidays in the Greater Bay Area in future. What policy changes or incentives would you suggest?
I do not think it is a question of specific incentives, but rather giving people the confidence that they can anticipate livelihood support equivalent to that of Hong Kong in terms of education and health care, [among others]. I think if we can build sustainable communities in the Greater Bay Area, the quality of life could play a major part in mitigating other concerns. From a marketing perspective, we need to move away from describing the initiative as “integration” towards “collaboration” and “co-operation” with the PRD cities which will benefit all. This will address the worries of those who see Hong Kong’s autonomy being diluted.
The Hong Kong and mainland China real estate markets are based on two very different legal systems, not to mention transparency, taxation and policy environment. Will establishing free-trade zones or special administration zones encourage Hong Kong homebuyers to look north?
In the short term, I think we have to accept the status quo, therefore the factors highlighted will be significant considerations in the minds of potential purchasers. Part of any marketing campaign will be the need to address the issue of confidence and help purchasers understand their real estate rights and obligations on the mainland whichare largely modelled on Hong Kong. There have been discussions about establishing large communities which would be managed along Hong Kong lines, and this is something that could be explored.
Which real estate sectors will likely benefit from continued integration?
The residential sector could benefit most from closer collaboration within the Greater Bay Area and I would not focus on one subset in that if we build large urban communities and adopt a holistic approach then this would include housing of all types - rental, affordable, family homes, upper market accommodation, housing for youngsters and the elderly. However, such communities will need retail and other support and those who do not need an office in the urban areas of Hong Kong could well decide to relocate their businesses to the PRD, so that, ultimately, all sectors could be affected. I can see possibilities for radical change.