Coronavirus pandemic sapped Hong Kong buyers’ appetite for Greater Bay Area houses as investment fell 40 per cent last year

Hongkongers spent some 30.9 billion yuan (US$4.7 billion) on new homes in the bay area, 40 per cent lower than the previous year, Centaline data shows
Property transactions will rise by 25 per cent to 200,000 deals this year once cross-border travel resumes, Centaline’s Andy Lee says

Coronavirus Hong Kong

Sandy Li

Published: 11:14am, 1 Apr 2021

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Hong Kong investors’ appetite for property in the Greater Bay Area fell drastically last year as travel restrictions due to the coronavirus pandemic kept buyers away.

Buyers spent some 30.9 billion yuan (US$4.7 billion) on new homes, 40 per cent lower than the previous year, while the number of transactions fell 46 per cent to 161,000, Centaline Group, the top seller of Chinese property to investors from Hong Kong, said on Wednesday.

Travel between Hong Kong and the mainland has fallen off a cliff as both sides have maintained tight border restrictions to keep the Covid-19 pandemic in check. However, hopes of curbs easing in the second half of the year are rising amid mass vaccination programmes in both places.

“Demand from Hongkongers for homes in the Greater Bay Area should see a strong rebound once the border reopens in the second half this year,” said Andy Lee, Centaline Property Agency (China) for southern China.

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He expects the number of transactions to rebound by 25 per cent to reach 200,000 this year, and home prices to rise by an average of 5 per cent across Greater Bay Area cities on the mainland.

Hong Kong’s government unveiled in November a proposal by Beijing to ease home ownership and employment rules for its residents in the Greater Bay Area. Before then, some mainland cities imposed ownership buying curbs on Hong Kong residents, including requiring a certain period of residency and taxpaying status.

The Greater Bay Area represents China’s push to link Hong Kong and Macau with nine Chinese cities in the Pearl River Delta, namely Guangzhou, Shenzhen, Zhuhai, Foshan, Zhongshan, Dongguan, Huizhou, Jiangmen and Zhaoqing, and turn them into a regional financial and business hub.

To tap growing demand for homes in the bay area, Centaline Group formed a new a B2B platform You Quan (FYQ) or “friends of buying homes” last October, targeting other agents selling residential projects in the Greater Bay Area. The agency, which has 700 outlets in the nine mainland bay area cities, accounted for about 17 per cent of the 1.43 trillion yuan in home sales recorded in the region in 2019.

Centaline’s B2B platform has listings from 1,600 new property projects, said Lee.

The Centaline GBA Home Index, which has been tracking new and used homes in the Greater Bay Area since July 2017, has risen for three straight months, touching a new high of 123.03 in February, with Shenzhen recording an increase for 19 straight months since August 2019.

Property prices in Shenzhen, the wealthiest city in southern Guangdong province, have surged 40 per cent in the last 19 months, compared with 29 per cent in Foshan and 6 per cent in Zhuhai, which are also popular investment destinations among Hongkongers, Centaline data showed.

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