Are mainland Chinese buyers still in the mood for loving Hong Kong homes?
- Singapore, Dubai, Thailand, Australia, the UK and the US are just some of the other options Chinese property buyers are pursuing currently
- Rising borrowing rates have made Hong Kong less attractive to mainlanders, JLL executive says
But even after the country’s borders reopened, allowing wealthy Chinese nationals to return to their old haunts for property purchases, a once-favoured destination is not a part of her plans.
“Hong Kong’s future is not clear,” Dong says. She owns property in Bangkok and is eyeing Japan – where she said her daughter is going for a business degree – for her next purchase.
“The borrowing interest rate hike has [made Hong Kong] less attractive to mainlanders,” he said. These buyers already face difficulties in bringing capital to Hong Kong because of the mainland’s capital controls, while “non-local end users settling in Hong Kong face more difficulties in buying homes because they need to prepare a much higher upfront payment than local buyers for the same property, due to higher stamp duties and the lower maximum loan-to-value allowed”.
What Hongkongers need to know about the UK mortgage process
Hong Kong’s property market – left battered by social unrest and then the coronavirus pandemic over a period of three years since 2019 – is certainly missing mainland Chinese buyers. For instance, non-local buyers in April accounted for a mere 71 transactions, or 1.5 per cent of the total, far lower than the previous average of 5.2 per cent, according to official data. Mainland buyers traditionally make up the bulk of non-local property purchases in Hong Kong – in 2019 they accounted for 8.4 per cent of the total home sales in Hong Kong, according to Midland Realty.
Hong Kong’s loss is London’s gain. Last Saturday, dozens of mainland investors packed a showroom in Shanghai to view homes at Hurlingham Waterfront, which overlooks the River Thames in west London. Prices at the project start from £595,000 (US$734,830) per unit. The showroom is moving to Beijing this weekend, where it is expected to draw more investors preparing to send their children to study in London.
04:03
Chinese buyers flock to Thailand’s property market in search of security following pandemic
Moreover, the ultra-rich have already made their move. Four recent transactions for “super-prime London units above £15 million” involved Chinese buyers, said Marc von Grundherr, a director at London-based property agency Benham and Reeves.
Some Chinese families are also eyeing the US, with New York being particularly attractive because of Columbia University and Cornell University for investors looking to send their children to two of the world’s most prestigious universities, said Georgina Atkinson, head of US residential developments, Asia-Pacific, Middle East and Europe, at Knight Frank.
Falling home prices, weak pound give Hongkongers a window to invest in the UK
Some investors are opting for destinations closer to home. In Singapore, the higher demand and interest from mainland buyers is evident in the latest government data.
In just the luxury segment, or homes in Singapore’s core central region, Chinese buyers bought 140 units in the January-to-April period, accounting for 9.6 per cent of all transactions in the segment, higher than the 73 units or 5.5 per cent of the total property transactions in the same period in 2022.
01:55
Malaysia’s China-linked multibillion-dollar ghost town project stalled by Covid and capital curbs
“Chinese demand was higher because outbound travel restrictions from China were eased at the start of 2023,” Cheong said. “Although mass tourism had not taken off in a big way, ultra-high-net-worth individuals from China began to make trips to Singapore. Those that had wanted to purchase a property but wanted to see the product could come over and that sped up the buying decision process.”
The tourism powerhouse of Thailand is another hot investment destination for the Chinese.
“The Chinese continue to dominate foreign ownership of flats, accounting for about half – or 1,747 units transferred – of the total for the quarter,” said Waras Dechgitvigrom, senior manager of research and communication at Colliers Thailand. The consultancy forecast that by the end of this year, Chinese buyers would have bought about 6,500 flats in Thailand.
Chinese buyers throng Australia in ‘serious mood’ about buying homes
Elsewhere, Australia, given its relative proximity to China, has emerged as a more convenient base for remote business, analysts said. This, coupled with the easing of tensions between Canberra and Beijing, helped the land Down Under attract more interest from mainland buyers, according to data tracked by Juwai IQI and 58 Anjuke Real Estate Research Institute.
“There are about three-times more mainland Chinese buyers in Sydney today than a year ago,” said Peter Li, general manager of the Sydney and Shanghai-based real estate agency, Plus Agency. “In the most popular areas, like the suburb of Chatswood in Sydney, which is a long-time Asian centre, there are about five buyers for every one we would have had a year ago.”
Australia, the US and the UK all offer good education options as well as paths to employment and eventually citizenship. “These are the opportunities that many Chinese buyers want for their children,” said Kashif Ansari, co-founder and CEO of Malaysia-based Juwai IQI.
Plot of sand on Dubai’s luxury Jumeirah Bay Island fetches record US$34 million
“With an investment of as little as 2 million dirhams (US$545,000), real estate investors in the UAE can now have access to a golden visa,” he said.
