Wealth Chinese snap up luxury property in Hong Kong, report showsFriday, February 05, 2010
Cash rich mainland Chinese buyers are snapping up luxury flats in Hong Kong which they regard as a good investment at a bargain price, according to research. Almost one in five luxury flats sold in Hong Kong last year, that is property worth more than HK$10 million, went to a buyer from the Chinese mainland, transaction data from Centaline Property Agency shows.
Mainlanders comprised made up 18.1% of buyers of luxury flats last year compared with 11.2% in 2008 and 9.2% in 2007. It was the sharpest growth in mainland purchases in six years, said Wong Leung-shing, an associate director of research at Centaline.
He said the buyers had taken advantage of a sharp fall in prices. ‘From 2004 to 2008 mainland buyers grew only 1 to 2% a year but since then the growth has been steady. The substantial increase in 2009 was due to the sharp fall in luxury property prices,’ Wong added.
Prices of luxury properties in Hong Kong have fallen 40 to 50% since the global financial crisis began in September 2008. ‘This attracted rich people from the mainland as they caught the best time to buy. Prices of luxury properties have since surged 50 to 70% from the bottom and have generated attractive profit,’ Wong explained.
In the overall property market, including mass residential properties, some 5.6% of buyers came from the mainland last year, compared with 4.3% in 2008.
Alva To Yu-hung, the head of consulting, North Asia, at consultant DTZ, said the loose monetary policy on the mainland was another factor contributing to the influx of mainland buyers last year. However, he expects the number of mainland buyers to drop this year as the central government tightens its monetary policies.
The mainland appetite for luxury real estate in Hong Kong is shown by the sales pattern at The Cullinan at Kowloon Station last year. The upmarket project attracted the highest proportion of mainland buyers among new projects in the city. Property agents said about 10% of buyers at the project held Chinese passports.
A declining unemployment rate, lower mortgage rates and a positive outlook on salaries is expected to boost property prices with experts forecasting a 10 to 15% rise in flat prices in Hong Kong this year. Major developers are expected to speed up the release of new housing projects to meet the buoyant buying sentiment in both primary and secondary markets, property agents say.
Source: [property Wire News]