Hong Kong posts record home purchases by mainland Chinese, realtor says

1:35 am Wednesday, July 17th, 2024

HONG KONG (Reuters) – Hong Kong saw record home purchases by mainland Chinese buyers in the first six months after the financial hub removed all buying curbs, major realtor Centaline Property Agency said, with their transaction value accounting for 31% of the total.

In late February, Hong Kong removed all additional stamp duties for foreign and second home buyers, as well as on those selling flats within two years of buying them, after prices had plunged 20% from their 2021 peak, hurt by higher mortgage rates, an outflow of talent and a weak market outlook.

During the first half, 6,117 new and second-hand homes worth a total of HK$70.5 billion ($9.03 billion) were purchased by mainland Chinese buyers, according to a Centaline survey that tracks buyers’ names with Mandarin spellings, up 70% and 42% respectively from a year ago.

The volume and value accounted for 25% and 31% of the total recorded in one of the world’s most expensive property markets during the period, respectively.

Centaline said the purchase volumes, value and contribution by mainland Chinese buyers were all at historical highs. The contributions have been below 15% before 2023.

The removal of extra stamp duties, a peak in interest rates and a slide in home prices have attracted more non-locals to buy in the market, Centaline Asia Pacific vice chairman Louis Chan said in a statement on Tuesday, particularly mainland Chinese who are either investors or have already acquired Hong Kong citizenship.

The realtor added mainland Chinese buyers usually prefer new and small-to-medium sized homes.

The mainland property market is mired in a multi-year slump, with new home prices falling at the fastest pace in nine years in June while property sales and investment continued to contract.

Despite the rise in foreign buyers, Hong Kong’s private home prices lost steam in May after much of the local pent-up homebuying demand was digested, dropping 1.2% from April after rising for two months in a row since the lift of all purchase curbs.

Last month survey company Demographia ranked Hong Kong as the least affordable city in the world for the fourteenth consecutive year.

($1 = 7.8064 Hong Kong dollars)

(Reporting by Clare Jim; Editing by Kim Coghill)