New | UnionPay bars Chinese buyers from swiping for Hong Kong property
Starting Friday, customers who carry cards bearing the UnionPay logo will be barred from swiping them to pay for down payment on Hong Kong property, another step in China’s policies to stem capital flight
UnionPay, China’s biggest interbank payments platform, has barred Chinese customers from using its transaction system to shop for property in Hong Kong, in the latest show of tightening capital controls on the mainland.
Any card with the UnionPay logo issued on the mainland will no longer be usable for registration payment for Hong Kong apartments, according to several agents.
“We received guidance that holders of China-issued UnionPay cards can’t buy properties in Hong Kong,” said Sammy Po, head of the residential department at Midland Realty International, a leading property agent.
As much as US$728 billion worth of capital left China as of November 2016, according to the French bank Natixis’ Capital Flow Tracker data, with US$246 billion in outflows in the third quarter. Much of that money had found its way to the city property market.
UnionPay, the dominant payments system for Chinese banks, is a popular means for mainland customers to put down registration fees on property, usually HK$100,000.
Chinese funds had been flooding into Hong Kong’s property market in the past year, as concerns about a deteriorating yuan spurred many residents and companies to park their cash in overseas assets as a hedge against currency losses.
The Cullinan West, one of the latest apartment projects to go on sale this month, is estimated to have sold 10 per cent of its units to mainland buyers.
“Recently, we have carried out investigations on large-sum, suspicious, cross-border UnionPay card transactions and reiterated to cooperating institutions the requirement to strengthen merchant supervision,” UnionPay said in a statement.