Hong Kong and Macau see a "northbound" housing buying boom
2024-08-24
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Image caption: Since the Shenzhen-Zhongshan Link was opened for trial operation on June 30, it has attracted a large number of Hong Kong people to Zhongshan and other mainland cities to view and buy houses. The picture shows the Shenzhen-Zhongshan Link Bridge and real estate projects on the Zhongshan side. (AFP)
Our correspondent in Hong Kong Feng Xuezhi and our reporters Chen Zishuai and Zhao Shuang
"The Hong Kong shuttle bus has departed, let's sign up to come to the mainland to view properties!" Nowadays, more and more new real estate projects in mainland cities in the Greater Bay Area are publishing similar advertisements in the Hong Kong media. In the first half of this year, the traffic connection between Hong Kong and the mainland was very active, with the average monthly number of "Hong Kong cars going north" exceeding 110,000 times, and the average monthly growth rate of Hong Kong single-plate cars entering and leaving the Hong Kong-Zhuhai-Macao Bridge was nearly 34%. Since the opening of another "main artery", the Shenzhen-Zhongshan Channel, on June 30, the cumulative traffic volume in the first month exceeded 3 million vehicles, with an average daily traffic volume of about 100,000 vehicles. In Zhongshan, the terminus of the Shenzhen-Zhongshan Channel, and Zhuhai, the terminus of the Hong Kong-Zhuhai-Macao Bridge, new and second-hand houses are being closely watched by Hong Kong and Macao home buyers.
Growing appeal
Li Yu, deputy general manager of the new home department of Zhuhai Zhongju Mengtian Holdings Co., Ltd., told the Global Times that July and August were traditionally off-seasons for the property market, but the opening of the Shenzhen-Zhongshan Channel this year attracted a large number of Hong Kong and Macau customers to "go north" to view properties. Many developers attracted customers to inspect properties by self-driving or property viewing tours from Hong Kong and Macau, and special experience tours (for example, two-day and one-night tours to experience local food and SPA massage). The Global Times reporter learned from the industry that as the "bridgeheads" of the two cross-sea channels, the property markets in Zhongshan's Ma'an Island and Zhuhai's Tangjiawan are currently the most popular, and a large number of intermediaries and property viewing shuttles are here to vigorously attract Hong Kong property viewers.
Zhongshan has long been attractive to Hong Kong homebuyers. Mr. Yu, a 46-year-old Hong Kong citizen, bought a large two-bedroom new house in Zhongshan in 2018. He and his parents go to the house in Zhongshan for vacation every weekend or holiday. "I go there almost once a month after customs clearance. Even if I do nothing, I feel very comfortable lying on the sofa in the living room." Mr. Yu said that he lived in a small house in Tuen Mun, Hong Kong with his parents and sister since he was a child. Although he moved out later, the house is still very small. It is difficult for people to relax in a space where you have to be careful to turn around. As for why he chose Zhongshan, Mr. Yu gave many reasons: good air, good greenery, high cost-effectiveness of life... The most important point is that there are many people who can speak Cantonese.
Mr. Yu told reporters that in the past, the only option to get from Hong Kong to Zhongshan was to take a boat. It took about an hour and a half to get to Zhongshan from the China Hong Kong City Pier in Tsim Sha Tsui, Hong Kong, and another half an hour to get home. Now, he can go to Zhongshan from the Hong Kong-Zhuhai-Macao Bridge or take the Shenzhen-Zhongshan Link. "Transportation in the Greater Bay Area is becoming more and more convenient, and more and more friends around me are going to the mainland for vacation," said Mr. Yu.
Ms. Li, a white-collar worker from Hong Kong who has already bought a property in Huizhou, has recently done her homework on buying a property in Shenzhen. She has taken a fancy to a new property near Shenzhen North Station and has visited it three or four times in the past two months. In Hong Kong, Ms. Li and her friends share a two-bedroom apartment, and the rent, utilities and other expenses she has to pay are about HK$10,000 per month. In order to have her own house as soon as possible, Ms. Li has visited properties in Hong Kong many times. She told reporters that after the Federal Reserve raised interest rates several times, many banks in Hong Kong raised their deposit and loan interest rates, and the monthly payment exceeded her affordability, so she had to wait and see again. "Hong Kong's property prices are falling, but rents are rising. This is because many people have this mentality: interest rates are too high, and house prices have no bottom, so it's better to rent than to buy a house," she said.
"It only takes 10 minutes to walk from the property to Shenzhen North Station. The high-speed rail service between Shenzhen and Hong Kong is very frequent now, so it is very convenient to travel back and forth on weekends." Ms. Li said that as her parents are getting older, she wants to be closer to them. Shenzhen's houses are big enough and the medical conditions are good, which are important reasons why she wants to buy a house in Shenzhen. She said that she has prepared the down payment and finally bought the house near Shenzhen North Station at the right time.
What do Hong Kong and Macao home buyers look for?
Guan Rongxue, a senior analyst at Zhuge Data Research Center, told the Global Times on the 23rd that the core demand of Hong Kong and Macao residents for real estate purchases in mainland cities in the Greater Bay Area may be in two aspects. First, the high housing prices in Hong Kong and Macao make it difficult for many local residents to afford them, and they begin to look for alternative housing options. Due to its close geographical location and relatively suitable housing prices, the Greater Bay Area has become one of the first choices for Hong Kong and Macao residents to buy houses, especially Zhongshan City and Zhuhai City. Second, Hong Kong and Macao residents are pursuing investment opportunities in the Greater Bay Area real estate market. These housing purchase demands have also injected new vitality into the Greater Bay Area real estate market.
A home buyer told the Global Times that as of August this year, housing prices in many mainland cities in the Greater Bay Area have fallen significantly from the high prices of previous years. Data from a mainland real estate information platform showed that the average transaction price of second-hand residential properties in Shenzhen was 57,900 yuan per square meter, down more than 20,000 yuan from the peak in 2021. The average price of second-hand houses in other mainland cities in the Greater Bay Area, such as Zhongshan, has dropped from 12,000 yuan per square meter in September 2021 to 9,977 yuan per square meter; during the same period, housing prices in Zhuhai have dropped from 22,000 yuan per square meter to 17,400 yuan. This has led some Hong Kong and Macao home buyers to believe that the time has come to buy.
Chen Yongjie, Vice Chairman of Asia Pacific and President of Residential Department of Centaline Property Agency Limited, told the Global Times that before the pandemic, Hong Kong people were very enthusiastic about buying properties in mainland cities in the Greater Bay Area, mainly for investment and vacation needs. As the transportation network in the Greater Bay Area becomes more and more convenient, Hong Kong people are more interested in buying properties in the mainland for their own use. Since the beginning of this year, most of the Hong Kong people who buy properties in the north served by Centaline Property have mainly lived in their own homes, and their property purchase budget is basically within 3 million Hong Kong dollars. After the opening of the Shenzhen-Zhongshan Channel, the proportion of customers who buy properties in Zhongshan and Zhuhai is particularly high.
Li Yu summarized some common characteristics of Hong Kong and Macao customers to the Global Times reporter: Hong Kong and Macao customers tend to buy large, mature, ready-built residential areas, with 2 to 3 bedrooms as the main apartment types. Some customers now tend to choose apartments with lower total prices, because Hong Kong and Macao buyers who buy properties in the mainland are older, mainly for retirement, and do not want to put too much financial pressure on themselves, so they choose apartments more. At the same time, they pay more attention to the location convenience of the property, especially near the Hong Kong-Zhuhai-Macao Bridge and the Shenzhen-Zhongshan Link, and consider the convenience of returning to Hong Kong and Macao.
Zhuhai Huafa Industrial Co., Ltd. (Huafa Group), which mainly engages in real estate development, said in an interview with the Global Times that under the ultra-high housing prices, most Hong Kong customers can only realize their housing needs once, and the needs for improvement, vacation, and transfer configuration have overflowed to the mainland, forming a "northward" Bay Area real estate boom. According to statistics from Huafa Group, in the past five years, Hong Kong residents who purchased Zhuhai Huafa real estate were mainly middle-aged groups aged 36 to 55, with a total price of between 1 million and 4 million yuan. Among the 75 groups of Hong Kong customers who have recently purchased real estate in Zhuhai in the past two years and plan to purchase real estate in Zhuhai in the next two years, the core demand is to improve the quality of life and reduce the cost of living. When choosing an apartment, the most concerned factors are "high practicality", "square apartment", and "north-south transparency", and they hope to have a larger living room and bedroom. They prefer fine decoration and pay high attention to community facilities and property management.
Convenience, but also risks
Ms. Li told the Global Times that during the previous purchase process, some preferential policies of the mainland government and banks on home purchase and mortgage were also one of the key factors that prompted her to buy a house. In response to inquiries from the Global Times, Industrial and Commercial Bank of China (Asia) said that in response to the increasing demand of Hong Kong customers to "go north" to buy houses, Industrial and Commercial Bank of China (Asia) provides mortgage loan services under the "Greater Bay Area Home Purchase Pass", which covers designated first-hand houses or current leased houses in nine mainland cities in the Greater Bay Area. Hong Kong people can "borrow in Hong Kong and repay in Hong Kong".
The People's Bank of China and the Hong Kong Monetary Authority launched the "Three Links, Three Conveniences" measures in January this year. From February 26, Hong Kong residents can directly remit a lump sum to the mainland to purchase existing or pre-sold houses, no longer subject to the previous daily remittance limit of 80,000 yuan. From May 29, 2024, Shenzhen will lower the minimum down payment ratio for personal housing loans, and the minimum down payment ratio for the first home will be adjusted from the original 30% to 20%. In early July, Guangzhou relaxed the housing purchase policy for Hong Kong, Macau, Taiwan and foreigners: there is no limit on the number of houses purchased for purchases of more than 120 square meters.
Although the convenience of buying a house "north" is attracting the attention of more and more Hong Kong people, some Hong Kong real estate agencies on social media have reminded people to be rational when buying a house at the moment, and emphasized that not all properties in Greater Bay Area cities such as Zhongshan and Zhuhai have investment potential and are not suitable for retirement life.
On YouTube, some Hong Kong real estate analysts said that Hong Kong people should not have too much speculation when buying houses in the mainland. For example, many of the properties in the Ma'an Island area of Zhongshan, which have attracted much attention recently, have not been able to benefit from the opening of the Shenzhen-Zhongshan Link due to location issues. In addition, as Guangzhou Nansha District will be directly connected to the Shenzhen-Zhongshan Link in the future, the congestion caused by increased traffic flow also needs to be taken into consideration by home buyers.
Guan Rongxue said that the investment returns of different properties in the Greater Bay Area are not consistent. This depends on factors such as the project's geographical location, market demand, and surrounding supporting facilities. Homebuyers should make choices based on their own risk tolerance. Moreover, in the current real estate market, some areas and properties may be more popular, but the market volatility is also relatively high. Buyers need to buy rationally, consider long-term planning and personal actual conditions, and avoid blindly following the trend. ▲#Deep Good Articles Project#
