The proposal would make it easier to buy Hong Kong property and boost the battered market, says the party A pro-Beijing party has asked the central government to consider allowing mainland residents to buy property in Hong Kong through transactions completed on the mainland. The Democratic Alliance for Betterment of Hong Kong (DAB) said the proposal, which would boost Hong Kong's battered property market, did not appear to breach the mainland's foreign exchange controls. Under the Capital Investment Entrant Scheme announced on September 30, overseas investors will get right of abode in Hong Kong if they invest $6.5 million in property or financial assets. But the plan does not cover mainland residents because of foreign exchange controls imposed by the central government. DAB secretary-general Ma Lik said some Hong Kong property developers which had a presence on the mainland were interested in the proposal. 'It seems our proposal does not violate the mainland's foreign exchange controls because the money would not flow out of the country,' said Mr Ma, who is also a Hong Kong deputy to the National People's Congress. DAB vice-chairman Ip Kwok-him said a group of party delegates had raised the idea with officials of the Ministry of Commerce during a visit to Beijing early last month. He said the officials, including Vice-Minister of Commerce An Min, promised to study the feasibility of the proposal. 'I think the central government will likely give a green light to the proposal in the future,' Mr Ip said. In a survey conducted by Centaline (China) Property Consultants last month, nearly 40 per cent of 1,000 respondents in Beijing, Shanghai, Shenzhen, Guangzhou and Zhejiang said they were interested in buying flats in Hong Kong. Property analysts cautiously welcomed the proposal. Buggle Lau, chief analyst at Midland Realty, said the proposal could be used to get around the central government's currency restrictions. 'The developers' attitude is that they would welcome mainland buyers coming to Hong Kong to buy property and how they pay the down-payment or full-payment is really up to the buyers,' he said. But Sherman Lai Ming-kai, general manager of Centaline (China) Property Consultants, said the proposal might violate the foreign exchange controls. 'The mainland buyers could sell their flats in Hong Kong and [keep] the Hong Kong dollars gained from the sale. Hong Kong developers have not yet introduced this sales model because they fear it's inconsistent with mainland laws.' At present, Hong Kong developers and estate agents are allowed to promote residential projects on the mainland, but the payments must be made in Hong Kong. Mr Lau said developers might face problems in getting the money back to Hong Kong. 'If the buyers pay in Hong Kong, the money can go into a bank account straight away. But if a buyer pays on the mainland, I'm not quite sure how developers could get the money to Hong Kong.'