Mainlanders snap up Hong Kong luxury homes as China tightens market restrictions

The pace at which mainland capital is flowing into Hong Kong’s luxury residential market has increased after more Chinese cities introduced or tightened curbs on house buying, according to industry experts.

For the first two weeks of this month, realtors said about 30 per cent of Hong Kong’s new luxury homes were purchased by mainland buyers. According to data from Centaline Property Agency, mainland buyers accounted for 14.8 per cent of total home sales in the second quarter of the year.

“Mainland investors have started to look for investment alternatives as property prices soar in most Chinese cities. The trend became obvious after the Chinese government stepped up tightening policies to dampen buying desires,” said Louis Chan Wing-kit, managing director of Centaline’s residential department.

Lured by an array of incentives being offered by Hong Kong developers, such as discounts and stamp duty rebates, Chan said mainland investors were focusing on buying homes priced above HK$30 million in new projects.

Recently, mainland investors have snapped up 20 to 30 per cent of the units on sale in two new luxury residential projects - Marina South in Aberdeen and The Zumurud in Ma Tau Kok.

In addition, a mainland developer was in talks to buy collection of villas offered by Shun Tak in Chung Hom Kok, Stanley, for HK$1.8 billion, according to sources familiar with the matter.

Buying momentum from the mainland has accelerated amid a tightening of restrictions on home purchases nationwide as the authorities try to cool the sizzling property market. Starting with Beijing on September 30, the eve of National Day and the beginning of the golden week holiday, more than 10 cities imposed restrictive measures ranging from raising down-payment requirements to barring non-local buyers, in the space of seven days.