“[We have] had a very busy year with transactions from Hong Kong based expatriates,” said John Treacy, director at One Global Expat, which handles expat clients of Singapore-based property agency One Global Property Services.

“Over 150 expatriates have purchased with us in 2021, which is up 40 per cent from last year.”

Bad practices ‘all too common in Hong Kong’s overseas property market’

Treacy, whose clients are mostly British, followed by Australians and other Europeans, said most of the transactions have been in the UK, with most buying purely for investment.

The group’s clients in Hong Kong typically look for new flats in London and other major cities in the UK, such as Birmingham and Manchester, with average transaction prices of £275,000 (US$376,000).

Not everyone is buying just for investment though. The number of registered French citizens living in Hong Kong has steadily declined since last year, from 14,000 to 12,500 so far this year, according to Herve Guinebert, managing director at the Hong Kong representative office of Paris-based Banque Transatlantique.

“The volume of mortgage applications from French people that we handled this year was up 30 per cent from last year,” he said. “Many of them are looking to buy properties in medium-sized cities in France, where they can have a bigger space, more greens and better living conditions.”

Guinebert said there were two main reasons for this. One is that their work contract is ending this year, while the other is that some want to return because they have not been back to France since the pandemic began two years ago.

Hong Kong’s maximum 21- day quarantine for returning residents who travelled outside the city is the world’s most stringent, prompting the influential Asia Securities Industry and Financial Markets Association, which counts 150 banks and asset managers such as Black Rock, Goldman Sachs and JPMorgan as members, to urge the government to give a clear road map of how the city plans to resume normal operations like other financial centres.

Nine out of 10 association members said they were finding it difficult to operate in Hong Kong because of the highly restrictive Covid-19 policies, while 48 per cent were contemplating moving staff or functions away from Hong Kong amid such challenges, a recent survey of 30 members showed.

France’s low-interest rate environment is also helping fuel transactions there. A 15-year mortgage can have as low as 1 per cent annual interest, while a 20-year loan is likely to have a little over 1 per cent interest.

While most of the French bank’s clients in Hong Kong are looking to buy properties back home, with popular options including homes worth 2 million euros (US$2.3 million) to 3 million euros in France’s southeastern and western regions, some are also looking for property in Portugal and Spain.

If more expats leave the city, it will “potentially soften rentals as many expats can’t deal with the logistics of the quarantine if they have children who live out of Hong Kong, especially if they are boarding school age or have elderly parents as the quarantine makes it prohibitive to go back and forth,” said Victoria Allan, founder and managing director of Habitat Property. “So we are seeing many expats either decide to leave Hong Kong for good, or leave Hong Kong for a year or two.”

Allan said many expats are considering selling properties they own in Hong Kong and returning to their home countries, as they feel the quarantine is so restrictive that it is detrimental to their quality of life.