Chinese buyers purchased more than one in three new luxury flats in Hong Kong in the first half of 2010, an increase of over 50 percent than in the second half of 2009.
“Hong Kong property prices have become around 25 percent cheaper to China buyers because of the appreciation of the yuan in recent years. It is very attractive to them,” said Louis Ng, director at real estate agency Ricacorp Properties.
Beijing’s recent measures to curb property speculation also urged mainland investors to change their focus to the Hong Kong market, said Ng.
Based on research conducted by Centaline Property Agency, approximately 35.1 percent of new luxury units costing over HK$12 million were purchased by Chinese buyers, compared to 22.5 percent in H2 2009.
Meanwhile, in the secondary market, investors from across the border purchased only 16.7 percent of luxury units worth over HK$12 million.
The number of Chinese buyers of luxury homes in the secondary market has remained flat since H1 2009, but it continued to increase substantially in the primary market, said Wong Leung-sing, associate research director at Centaline.
In the mass residential market, new homes remained the most popular to Chinese buyers, with approximately 13.2 percent of new mass residential homes worth less than HK$12 million acquired in H1 2010, up from 11.9 percent in H2 2009.
Chinese buyers made up only 5.8 percent of the units sold in the second-hand mass residential market in H1 2010, compared with 5.7 percent in H2 2009.
Mr. Ng reckons that less than 10 percent of his Chinese clients purchased flats for immigration reasons and believes that the influx of mainland buyers would continue despite the Capital Investment Entrant Scheme, which calls for the temporary removal of property from the investment asset classes.
“Most of them bought the flats for long-term investment purposes or for personal use. They will keep the flats even if property prices rise sharply. You can see the number of flats in the estate on Kowloon Station available for sale has been decreasing as mainland flat owners are reluctant to sell. They are proud to own a property in Hong Kong,” he said.