Mainland Chinese buyers have benefited the most from the removal of Hong Kong’s property curbs, have stepped up luxury purchases, JLL says

These buyers have accounted for 70 per cent of the primary sales of luxury residential properties this month, rebounding from less than 50 per cent before the removal of the curbs, the real estate and investment management services firm said in a monthly report on Monday.

“Mainland Chinese buyers have benefited the most from the removal of the cooling measures,” Norry Lee, senior director of the projects strategy and consultancy department at JLL in Hong Kong, said in the report.

“With the addition of the Top Talent Pass Scheme, there has been a significant increase in the number of mainland Chinese buyers in the primary market, and these buyers are expected to remain active in the market.”

The Hong Kong Mortgage Authority followed suit with its own easing measures. Homes valued at less than HK$30 million are now eligible for 70 per cent mortgage financing, compared with the previous cap of 60 per cent for flats valued between HK$15 million and HK$30 million.

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More of the recent primary sales in Grand Homm in Ho Man Tin, and Cullinan Sky and Pann Harbour in Kai Tak, which are worth HK$30 million or more, were from mainland buyers, an industry expert said on condition of anonymity. Mainland buyers favour first-hand luxury homes, but they might not have a particular focus on certain districts, they added.

For instance, in January, a mainland buyer linked to the founder of Mindray Bio-Medical Electronics snapped up an ultra-luxury house on The Peak at a 35 per cent discount. The mansion on 25-26 A&B Lugard Road sold for HK$838 million, or HK$71,703 per square foot, according to Savills.

The transaction incurred a total of 15 per cent – or HK$126 million – in stamp duties.

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Hong Kong’s first-hand residential market has seen an immediate uptick since the removal of all cooling measures, as developers have accelerated the pace of new project launches, with some offering additional incentives on top of existing concessions.

As of Friday, about 3,000 transactions have been recorded in the primary market this month, according to Midland Realty. The property agency expects first-hand transactions to reach 4,500 for the whole month, which will be the highest since November 1998.

“Non-local buyers have yet to return in full force due to the heightened foreign exchange restrictions [on the mainland], the rigours of mortgage applications and the property viewing process,” said JLL’s Lee. “We believe that the overall transaction volume will receive a more significant boost once these restrictions are lifted and the Chinese economy improves.”

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The current surge in primary property sales is due to two factors, JLL said. These are: significant price corrections, which have seen some projects being priced about 30 per cent cheaper than levels recorded in 2021; and the release of pent-up demand.

“We maintain a cautious view on the market outlook.”