By: ciciola on Giovedì 03 Gennaio 2013 11:12
Attenzione: l'immobiliare inizia a scricchiolare anche da queste parti...
Mainland buyers bailing out - The Standard
The number of mainlanders purchasing Hong Kong flats plunged by more than 90 percent within a month of the Buyer's Stamp Duty being implemented - although they still account for the majority of BSD transactions.
In the primary residential market, the proportion of mainland buyers dropped from about 30 percent to 4 percent, and in the secondary market, from about 20 percent to virtually zero (0.2 percent).
"The number of mainland customers coming to Hong Kong to view flats has plunged 70 percent in one month," said Cheung Kam-shing, executive director of Midland Holdings (1200).
"And transaction volume has dropped even more - by over 90 percent."
Only 25 BSD-applicable transactions were recorded one month after implementation of the new tax, which slaps a 15 percent levy on home purchases by foreign or corporate buyers, and other non-permanent residents.
Still, mainlanders acquired most of the 15 primary flats and nine of the 10 secondhand homes that incurred the Buyer's Stamp Duty. The 10th was bought by a Singaporean.
Ms Ng, who lives in Shenzhen, came to view three flats at Parkland Villas in Tuen Mun on November 26, one month after the BSD took effect.
"My friends tried to persuade me not to buy now, but I couldn't hold off much longer," she said. "If property prices later increase and currencies depreciate, then what should I do? I must buy quickly to avoid regrets."
So Ng bought an 830-square-foot low-level apartment for HK$3.6 million, or HK$4,337 per sq ft, paying an extra HK$540,000 in stamp duty.
"Who is willing to buy a flat at a high price? I bought it because I have housing needs. If I didn't have to provide a better studying environment for my daughter, I wouldn't be willing to spend so much on a flat in Hong Kong," Ng said.
"A BSD of 15 percent is already very high. I can't believe what it'll be like if it increases further.
"I only belong to the middle-income household group in Shenzhen. How can I consider the flats in Kowloon? I'm only capable of buying Tuen Mun flats."
About one-third of BSD-applicable homebuyers last month shared Ng's motivation for purchasing in this climate.
"Mainland customers buy Hong Kong flats mainly because they have children studying here, or they like the local health-care system. They buy only if they have actual needs," said Ricacorp Properties head of research Patrick Chow Mun-kit.
Some wealthier mainlanders are also acquiring apartments for their own use.
A 1,176-sq-ft high-level apartment at Chinese Estates Holdings' (0127) One Wanchai was sold for more than HK$20.51 million, or about HK$17,400 psf. It is the only BSD transaction on Hong Kong Island so far.
"That mainland buyer always frequents Hong Kong. He hesitated over whether to buy a local flat after the BSD took effect," a property agent said. "But he finally decided to buy it as he thought he'd have to buy one anyway. It was just a matter of time."
Louis Chan Wing-kit, Centaline managing director for residential sales, said there are two types of BSD buyers.
"The first type has actual needs, such as mainlanders who have children studying in Hong Kong, or prefer living in their own flats rather than renting during their stay," Chan said.
"The second type has lots of money. As there are home purchasing restrictions in the mainland, some mainlanders shift their money to Hong Kong to buy flats - even if they have to pay a rather high tax."
The most popular firsthand estate among mainlanders is The Reach in Yuen Long, developed by Henderson Land (0012). Seven BSD transactions were recorded at this project.
Sales brochures show a lot of the flats at The Reach are about 500 sq ft in size. Although the BSD would boost the prices to nearly HK$8,000 psf, the flats would still only cost around HK$4 million - which may be one of the major attractions for mainland buyers.
"The buying procedures for primary market flats are more convenient," Chan said. "Customers don't have to spend time on viewing as for secondhand homes. Also, developers' branding has contributed to mainlanders' confidence in the flats."
Secondary market homes also appeal to mainlanders, although housing estates in West Kowloon - which had previously been popular before the advent of BSD - saw fewer than five transactions last month.
Some mainlanders go for cheaper flats. One purchased an 816-sq-ft flat at the 47-year-old Tim Wah Building in Tsuen Wan for HK$5.4 million, or HK$6,618 psf.
"Mainland buyers are taking a wait- and-see attitude as the cost has increased. But I believe they will buy property again after some time," said Ivan Tsang Chi-kwong, assistant sales director at Midland Realty.
Edward Cheung Siu-chuen, chairman of 18 Property Agency, pointed out that many mainlanders can afford the BSD, since they effectively enjoy a 20 percent discount when paying in yuan because of its favorable exchange rate against the Hong Kong dollar.
"So they won't lose," Cheung said. "However, they still hope to realize a profit. With the BSD, property prices have to increase by 20 to 30 percent before they break even on the investment.
"They know how to calculate, and they know the feasibility."