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How Hong Kong developers are adapting to the ‘new normal’ in the Greater Bay Area

Hong Kong developers are rethinking their strategies for projects in the Greater Bay Area, as the mainland’s property crisis has changed everything

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The property market in mainland cities within the Greater Bay Area, such as Guangzhou, has transformed since a debt crisis erupted in the sector earlier this decade. Photo: Shutterstock
Chris Tsang

Hong Kong developers operating in the Greater Bay Area are having to adapt to the ongoing debt crisis in mainland China’s property sector, which has led to deep and lasting changes in the nature and motivations of their buyers, according to agencies dealing in mainland real estate.

Before the debt crisis erupted earlier this decade, Hong Kong developers found that 90 per cent of buyers for their residential properties in the Greater Bay Area were Hong Kong investors. Now, they are increasingly selling to mainland homebuyers with genuine housing needs, said Henry Chung, senior managing director at Midland Realty.

Hong Kong buyers are now the “primary customer base” only for mainland projects in areas close to the Hong Kong border, such as Hengqin in Zhuhai and Ma’an Island in Zhongshan, according to Chung.

“Buyers for Hong Kong developers’ projects in inland urban areas like Guangzhou and Foshan remain predominantly local mainlanders purchasing for owner-occupation,” he added.

In Zhuhai’s Hengqin and Shizimen areas, Hong Kong buyers account for 40 per cent to 60 per cent of transactions at projects from Hong Kong developers Sun Hung Kai Properties, Henderson Land, and Wharf Holdings, according to data from Midland Realty.

However, Hong Kong buyers are only involved in 8 per cent to 15 per cent of transactions for the developers’ projects in Guangzhou’s Tianhe and Huangpu districts and Foshan’s Nanhai district, the data showed.

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