Hong Kong investors face 5-10 per cent correction in prices of homes in China’s ‘Greater Bay Area’
- Demand in city for residential property in integrated economic and business hub has reduced over the past two months
- Prices in cities such as Shenzhen have already started to drop
Hongkongers who bought property in the region covered by China’s “Greater Bay Area” initiative, in the hope of profiting from price increases following the opening of the High Speed Rail link in September and the Hong Kong-Zhuhai-Macau Bridge last month, could be in for a disappointment, according to industry watchers.
Demand among Hong Kong buyers for residential property in the area has been on the wane over the past two months. And now, those in the city who do own property in the Greater Bay Area could face a 5-10 per cent correction over the next 12 months, as the economic slowdown in China and repeated implementation of price cooling measures by Beijing take effect.
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“Hongkongers’ enthusiasm for homes in the area has been poor over the past two months, and is much lower than in the beginning of the year,” said Eric Lee, chairman of Century 21 Goodwin Property Consultants, an agency with a focus on property in the area.
As part of the initiative, Beijing plans to link Hong Kong and Macau with nine mainland cities – Guangzhou, Shenzhen, Zhuhai, Foshan, Zhongshan, Dongguan, Huizhou, Jiangmen and Zhaoqing – into an integrated economic and business hub to rival Silicon Valley.
Home prices in this region have skyrocketed over the past two to three years. Frenetic home buying lifted prices amid expectations that improved transport links would cut travel time between Hong Kong and the other Greater Bay Area cities to only an hour, as part of a “one hour living circle”.
“[Home prices] rose by as much as 50 per cent in the past two to three years,” said Raymond Cheng, head of Hong Kong and China research and property at CGS-CIMB Securities.