After the removal of extra stamp duties on foreign purchasers, investors from mainland China are rushing into Hong Kong’s real estate market, signaling a notable shift after a prolonged period of subdued activity.
Reports from both property agents and developers indicate that mainland Chinese buyers now constitute a significant portion, representing up to one-third of new property transactions in the city.
This surge coincides with uncertainties in China’s housing sector, including concerns about a debt crisis and economic instability.
Estimations provided by real estate agents suggest that mainland Chinese buyers currently make up between 20 percent and 30 percent of new home sales in Hong Kong.
Some investors have been observed engaging in bulk purchases, with instances where buyers have acquired as many as eight apartments in a single transaction.
The elimination of additional stamp duties, alongside incentives for foreign buyers, has encouraged mainland Chinese investors to seize opportunities in one of the world’s most expensive property markets.
The decision to remove these extra stamp duties, originally introduced to temper housing costs, follows a period of decline in Hong Kong’s property sector.
Housing prices dropped by over 20 percent from their peak in 2021 due to various factors, including increased mortgage rates, a drain of talent, and a pessimistic market outlook.
Despite the rise in sales driven by mainland Chinese investors, prices remain suppressed as developers offer discounts to reduce their inventory.
Analysts predict only a modest rebound in transaction volumes for the year, citing persistently high interest rates as a limiting factor.
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