“The entry of mainland buyers into Hong Kong property market effectively offsets the purchasing power loss caused by population outflow and emigration waves in recent years, providing stability to Hong Kong’s declining property prices,” Po said.
In recent project launches, mainland buyers contributed about 30 per cent of sales, higher than the 17 per cent they contributed in the fourth quarter of 2023 before the curbs were axed, Po said.
Raymond Cheng, managing director and head of China and Hong property at CGS International, said the proportion is even higher in some recent launches: 60 to 80 per cent.
Mainland buyers accounted for 20 per cent to 30 per cent of the total buyers of new homes before the measures were scrapped, Cheng said. Now, recent launches in districts that are close to prestigious primary and secondary schools, such as Wong Chuk Hang and Tseung Kwan O, are proving particularly popular with mainland Chinese buyers.
Meanwhile, prices of second-hand homes in the city rose by 1.06 per cent in March, the first gain in 11 months, according to data from the Rating and Valuation Department.
Analysts credited the revitalised real estate sector to the scrapping of measures such as the New Residential Stamp duty, which allows the purchase of additional properties without paying extra stamp duty, as well as the Buyer’s Stamp Duty that was meant to levy non-permanent residents.
Apart from securing flats for their children, mainland buyers also see Hong Kong homes as a good investment, said Derek Chan, head of research at Ricacorp Properties, who estimates that mainland buyers account for between 30 per cent and 70 per cent of current homebuyers, depending on the project.
“Properties in Hong Kong are of good quality, well-managed and easy to rent out,” Chan said. “The rental yield is generally 3 per cent or above, which is significantly better than the yield of properties in mainland China. Therefore, mainland investors are very willing to buy properties in Hong Kong.”
With the government actively courting more professionals to come to Hong Kong, Chan said some mainland buyers are buying in bulk.
CGS’ Cheng said that despite robust demand from mainland Chinese buyers, a housing glut is likely to keep home prices in check.
Hong Kong’s expected supply of new homes rose to a record high for a second consecutive quarter at the end of March. According to data released by the Housing Bureau late last month, the supply is now expected to reach 112,000 units in the next three to four years. The estimate represents a quarter-on-quarter increase of 3,000 units, or 2.7 per cent, from an expected supply of 109,000 units as of the end of December last year.