Beijing property curbs may boost HK, Macau

PUBLISHED : Friday, 30 March, 2007, 12:00am
UPDATED : Friday, 30 March, 2007, 12:00am

Beijing's determination to restrict foreign property investment could boost Hong Kong and Macau real estate as overseas funds are diverted to the SARs, according to property consultant CB Richard Ellis.


'[The restriction] may help drive interest of funds to Hong Kong and Macau,' said managing director Rick Santos, who remained upbeat on the long-term outlook for the mainland property market.


He was referring to a statement by the Ministry of Commerce last week saying: '[The government] will take effective measures ... to strictly restrict foreign investment in the property sector.'


However, the guidelines were short on details.


The central government has introduced a series of measures since July last year, such as raising interest rates and property taxes and requiring foreign investors to set up onshore entities that follow domestic accounting rules, to curb inflows of hot money into the property market.


However, DTZ Debenham Tie Leung research director Alva To Yu-hung said international funds were unlikely to shift their focus to Hong Kong from the mainland since the tightening measures were targeting speculators, not long-term funds.


He said the policies would only lengthen the decision-making process of foreign investors. 'They will become more careful,' he added.


In the first quarter this year, there were 52 property transactions in Hong Kong worth more than HK$100 million, up from 42 deals a year earlier, CBRE said. However, total value fell 20 per cent to HK$15.3 billion.


'We see new private equity funds and hedge funds flowing into the market every day,' Mr Santos said.