Hong Kong property buyers in Shanghai are increasingly turning to the secondary market, whose growth is being encouraged by the government and state banks, according to agents and brokers. They say the city's secondary market is more developed and mature than in other mainland cities because of efficient procedures, such as the provision of loans and quick issue of certificates of ownership, enabling the buyer to sell on. The city government is promoting the property market to buyers all over China and the world. In Beijing, by contrast, many buyers complain that they cannot obtain the ownership certificate for years because the developer has put up the building without obtaining all the necessary permits. This is stifling the development of the secondary market. 'Most Hong Kong buyers purchase second-hand homes, with more than half using them as their own residence,' said Chapman Cheng, of City Integrated Residential Services. 'Trading in the secondary market will overtake that in the primary market this year for the first time. We could not imagine this even two years ago. 'Hong Kong people prefer properties built by big developers from Hong Kong or Singapore rather than those by local developers.' Jessie Zhou, sales director of Shanghai Newtown Real Estate Agent, in the Gubei district, said Hong Kong people liked the secondary market because it was more liquid and offered more choice. 'The difference with Hong Kong buyers is that they invest more and are more likely to rent to others, while our Japanese and Korean clients buy for their own use,' she said. 'Hong Kong people like apartments with three rooms, 150 to 200 sq metres, costing 1.5 million yuan (HK$1.4 million) to two million yuan. Some pay even more than two million. he rule is: the newer, the better. 'They take loans of up to 70 per cent of the purchase price, in yuan or US dollars. The market for second-hand properties is better than for first-hand ones. In my view, it is all one market. As for location, my recommendation is Gubei or Xujiahui.' Mr Cheng said he advised buyers not to consider whether a property was first- or second-hand but whether it fitted their requirements in terms of size and location. 'The best locations are Xujiahui, Jing An district and Lujiazui in Pudong. Gubei is more popular with Taiwanese.' An estimated 300,000 Taiwanese live in Shanghai, including many who have sold all their assets at home and 'migrated' to the mainland. 'Some Hong Kong people have done this, working here and bringing their families,' Mr Cheng said. 'But the phenomenon is more pronounced among Taiwanese. Some of them do not go back to Taiwan at all. But most Hong Kong people go back regularly.' Banks in Shanghai are eager to lend to buyers of both new and secondary properties. A Bank of East Asia official said that while the bank preferred to give mortgages on new homes, the key point was the property itself, more than whether it was second hand. 'If applications meet the conditions, we need a further two to three weeks to get the final approval for the loan,' he said. 'We are happy to offer them to Hong Kong people, in renminbi or foreign currency,' he said. An official of HSBC said it issued renminbi, Hong Kong dollar and US dollar loans to individuals for properties, including secondary ones. 'We need the identity card, tax receipt, proof of ownership and other documents. Buyers can pay back a fixed amount each month or every two weeks or they can pay more at the beginning and then less as the loan advances.' Domestic banks are also eager to offer loans to Hong Kong buyers. A niche part of the secondary market is individual homes built in central Shanghai for rich foreigners and Chinese before the second world war. The supply is limited and demand is high, from foreigners and Chinese alike. Many of the homes have gardens, a luxury in the concrete jungle of Shanghai. Ms Zhou said that while most Hong Kong people liked modern apartments, a small number preferred pre-war houses, which could be used as residences or turned into galleries or boutique restaurants. The average price is about 10 million yuan, for a home with two or three storeys and a garden.