Mainland Chinese investors are selling Hong Kong property
April 20, 2020 - Tai Po
Mainland Chinese investors and property owners are cashing in on their Hong Kong real-estate holdings, as appetite for outbound investment evaporates in China, which has just reported the first contraction in its GDP in four decades.
“With Covid-19 coming at a time of trade tensions, some forced selling is highly likely,” said Simon Smith, senior director of research and consultancy at Savills.
“Some mainland vendors whose businesses face cash flow issues, and landlords of properties with multiple mortgages, will be prepared to consider offers on a selective basis.”
“Areas traditionally popular among mainlanders have seen prices fall the most,” said Patrick Chau, senior director of residential development and investment at Savills.
A 639 sq ft flat at Century Link in Tung Chung sold for HK$7.6 million (US$980,550) recently.
“The homeowner was pessimistic about market prospects, so he did not hesitate to cash in,” said Dennis Wong, branch manager at Centaline Property Agency.
“As the homeowner is a mainlander, he had to pay the buyer’s stamp duty when he entered the market. His exit actually cost him about HK$2 million.”
Mainland buyers have also stopped buying Hong Kong property. The number of homes eligible for buyer’s stamp duty, which is paid by non-local or company buyers, plummeted to historic low of 42 in March, a 92.1% decline from a high of 534 in December 2017, according to the Inland Revenue Department.
And as this demand dwindles, home prices too are expected to decline further. “The downward adjustment in home prices has not finished,” said Wong Leung-sing, senior associate director of research at Centaline.
Read the rest of the story @ SCMP
Photo: HK01- The Beverly Hills in Tai Po
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