Buyers have been known to view a HK$100m-plus property for 10 minutes and decide on the spot to buy it - in cash
Richard Watt Aug 27, 2008
Mainlanders looking to buy property in Hong Kong have at their fingertips a host of benefits - not least of which is the opportunity to obtain residency. But for some mainlanders it is purely the prestige that comes with owning a luxurious flat in Hong Kong that they are looking for.
“Many rich people from the mainland want to buy [luxury] property in Hong Kong, not because they want to let it out, but because they want the prestige and pride they get from owning a luxury property here,” said Clearance Chow, senior regional sales manager at Centaline.
And luckily, for some of those people, money is no object. It is not uncommon for rich mainland buyers to come to Hong Kong, view a HK$100 million-plus property for 10 minutes and decide there and then to buy it - in cash.
And where better to spend all that cash and get a bit of well-earned respect than on The Peak?
“There is a huge project on The Peak called Severn 8, developed by Sun Hung Kai Properties. It has 22 houses, of which 13 have already been sold,” Mr Chow said.
“All of those 13 houses were sold to people who were not from Hong Kong. About half of them were sold to people from the mainland, and the other half to people from other Asian countries such as Vietnam.”
Severn 8 houses range from 3,300 to 5,100 sqft and have views over Victoria Harbour.
Mr Chow said that the most recent house sold at Severn 8, House 2, went to a mainland buyer for HK$285 million. “Local buyers think that the size and unit price of the houses are too much but mainlanders think `I just want the best one’.”
Mr Chow said last month a Centaline client from Shanghai bought a 6,200 sqft unit on Peak Road for HK$1.06 billion.
“You can’t imagine how wealthy they are. They bring cash to buy properties. They even bring cash to pay for a HK$280 million house.”
But not all buyers from the mainland are super-rich, with many simply looking for an opportunity to make money and have the right to live in Hong Kong. These buyers are generally looking for houses in the HK$6.5 million to HK$10 million range.
Willy Liu Wai-keung, managing director of Ricacorp Properties, said: “Most [mainland buyers] intend to apply for residency in Hong Kong through the Capital Investment Entrance Scheme.” The scheme entitles foreigners investing HK$6.5 million or more in the city to residency.
“If they purchase a flat in compliance with the rules [of the scheme] it may be counted as a permissible investment asset,” Mr Liu said.
Mr Chow said that these buyers wanted to live in Hong Kong because “the standard of living here is still a bit higher than on the mainland, taxation is more clear and the economy is more stable”.
“Education in Hong Kong is also better - not at university level but at primary and secondary school level. So if [mainlanders] have the money and they want their children to have a better standard of living, they choose to live in Hong Kong. And buying property here is the easiest way to get into Hong Kong,” Mr Chow said.
Mainland buyers looking for property within the range that will allow them to obtain an identity card tend to look for new developments in areas that offer easy access, value for money and good investment opportunities.
Mr Liu said: “Firstly they look for good transport. They particularly like developments at Kowloon station and Taikoo Shing.”
For Centaline, Mr Chow said that the most popular properties were Residence Bel-Air, near Cyberport, and Grand Promenade in Sai Wan Ho “because these are properties that are easy to rent out. In this price range more than 50 per cent of mainland buyers will rent the property”.
“They treat their property as an investment and buy into new buildings because new buildings usually have a faster growth rate than old buildings,” Mr Chow said.
New buildings, Mr Chow said, had other benefits for mainland buyers. “They have good facilities and are made from good materials. [Buyers] don’t need to worry about decoration and renovation. They want to buy something move-in ready.”
Mr Chow said in overall volume, mainland buyers probably made up about 10 per cent of total revenue for Centaline transactions in The Peak and South Island areas. Mr Lui estimated that in total, mainland buyers made up substantially less than 5 per cent of the market.
Mr Chow said: “In the past six months we have helped six to seven mainland buyers, at least one a month, to buy luxurious apartments. For apartments between HK$6.5 million and HK$10 million - we have closed abut 13 transactions in the past six months. You can see that the ratio is about 1:2.
“Exchange rates are becoming more favourable for overseas buyers, so the market is seeing higher interest from buyers throughout the region.
“Because the [value of] the Hong Kong currency has been dropping so much, people from other countries are not buying properties [here] at the same price as locals,” Mr Chow said.
“They are buying at a discount of maybe 10 per cent to 15 per cent because of the exchange rate. If we sell a property at HK$20,000 per sqft, for them it may work out at just HK$16,000. Once they buy the property they have already made a profit.”
Mr Chow said that it was easier to sell luxury properties to overseas buyers, and that it was quite often the case in many countries that top-end residences were bought by foreign buyers.
“The most expensive apartment in Canada was sold to a Hongkonger. Luxury houses in Dubai are being bought by people all over the world, not by locals.”
Finding buyers from the mainland is not difficult for a company such as Centaline, which has an extensive network of offices. “We have almost 2,000 sales agents in Hong Kong, but we have 16,000 in the mainland. We utilise this network by sending them all our information on properties here and they can distribute this to potential buyers,” Mr Chow said.
He said the property market in the mainland had slowed considerably, but this was not expected to affect the super-rich buyers looking for property in Hong Kong.
“The demand from Beijing for luxury houses is still high, but for normal properties the market has almost stopped. We heard from our Beijing office that the transactions on ordinary properties had dropped from 160 per month to as low as 10 to 12 per month in the past two months.
“But for luxury houses the demand is still high, showing that economic factors only affect normal people, not the super-rich.”
With few restrictions on foreigners wishing to buy property in Hong Kong, the future still looks bright for agents and developers looking to attract mainland clients to properties in the city.
1 comment:
Mainlanders see prestige value in HK
Buyers have been known to view a HK$100m-plus property for 10 minutes and decide on the spot to buy it - in cash
Richard Watt
Aug 27, 2008
Mainlanders looking to buy property in Hong Kong have at their fingertips a host of benefits - not least of which is the opportunity to obtain residency. But for some mainlanders it is purely the prestige that comes with owning a luxurious flat in Hong Kong that they are looking for.
“Many rich people from the mainland want to buy [luxury] property in Hong Kong, not because they want to let it out, but because they want the prestige and pride they get from owning a luxury property here,” said Clearance Chow, senior regional sales manager at Centaline.
And luckily, for some of those people, money is no object. It is not uncommon for rich mainland buyers to come to Hong Kong, view a HK$100 million-plus property for 10 minutes and decide there and then to buy it - in cash.
And where better to spend all that cash and get a bit of well-earned respect than on The Peak?
“There is a huge project on The Peak called Severn 8, developed by Sun Hung Kai Properties. It has 22 houses, of which 13 have already been sold,” Mr Chow said.
“All of those 13 houses were sold to people who were not from Hong Kong. About half of them were sold to people from the mainland, and the other half to people from other Asian countries such as Vietnam.”
Severn 8 houses range from 3,300 to 5,100 sqft and have views over Victoria Harbour.
Mr Chow said that the most recent house sold at Severn 8, House 2, went to a mainland buyer for HK$285 million. “Local buyers think that the size and unit price of the houses are too much but mainlanders think `I just want the best one’.”
Mr Chow said last month a Centaline client from Shanghai bought a 6,200 sqft unit on Peak Road for HK$1.06 billion.
“You can’t imagine how wealthy they are. They bring cash to buy properties. They even bring cash to pay for a HK$280 million house.”
But not all buyers from the mainland are super-rich, with many simply looking for an opportunity to make money and have the right to live in Hong Kong. These buyers are generally looking for houses in the HK$6.5 million to HK$10 million range.
Willy Liu Wai-keung, managing director of Ricacorp Properties, said: “Most [mainland buyers] intend to apply for residency in Hong Kong through the Capital Investment Entrance Scheme.” The scheme entitles foreigners investing HK$6.5 million or more in the city to residency.
“If they purchase a flat in compliance with the rules [of the scheme] it may be counted as a permissible investment asset,” Mr Liu said.
Mr Chow said that these buyers wanted to live in Hong Kong because “the standard of living here is still a bit higher than on the mainland, taxation is more clear and the economy is more stable”.
“Education in Hong Kong is also better - not at university level but at primary and secondary school level. So if [mainlanders] have the money and they want their children to have a better standard of living, they choose to live in Hong Kong. And buying property here is the easiest way to get into Hong Kong,” Mr Chow said.
Mainland buyers looking for property within the range that will allow them to obtain an identity card tend to look for new developments in areas that offer easy access, value for money and good investment opportunities.
Mr Liu said: “Firstly they look for good transport. They particularly like developments at Kowloon station and Taikoo Shing.”
For Centaline, Mr Chow said that the most popular properties were Residence Bel-Air, near Cyberport, and Grand Promenade in Sai Wan Ho “because these are properties that are easy to rent out. In this price range more than 50 per cent of mainland buyers will rent the property”.
“They treat their property as an investment and buy into new buildings because new buildings usually have a faster growth rate than old buildings,” Mr Chow said.
New buildings, Mr Chow said, had other benefits for mainland buyers. “They have good facilities and are made from good materials. [Buyers] don’t need to worry about decoration and renovation. They want to buy something move-in ready.”
Mr Chow said in overall volume, mainland buyers probably made up about 10 per cent of total revenue for Centaline transactions in The Peak and South Island areas. Mr Lui estimated that in total, mainland buyers made up substantially less than 5 per cent of the market.
Mr Chow said: “In the past six months we have helped six to seven mainland buyers, at least one a month, to buy luxurious apartments. For apartments between HK$6.5 million and HK$10 million - we have closed abut 13 transactions in the past six months. You can see that the ratio is about 1:2.
“Exchange rates are becoming more favourable for overseas buyers, so the market is seeing higher interest from buyers throughout the region.
“Because the [value of] the Hong Kong currency has been dropping so much, people from other countries are not buying properties [here] at the same price as locals,” Mr Chow said.
“They are buying at a discount of maybe 10 per cent to 15 per cent because of the exchange rate. If we sell a property at HK$20,000 per sqft, for them it may work out at just HK$16,000. Once they buy the property they have already made a profit.”
Mr Chow said that it was easier to sell luxury properties to overseas buyers, and that it was quite often the case in many countries that top-end residences were bought by foreign buyers.
“The most expensive apartment in Canada was sold to a Hongkonger. Luxury houses in Dubai are being bought by people all over the world, not by locals.”
Finding buyers from the mainland is not difficult for a company such as Centaline, which has an extensive network of offices. “We have almost 2,000 sales agents in Hong Kong, but we have 16,000 in the mainland. We utilise this network by sending them all our information on properties here and they can distribute this to potential buyers,” Mr Chow said.
He said the property market in the mainland had slowed considerably, but this was not expected to affect the super-rich buyers looking for property in Hong Kong.
“The demand from Beijing for luxury houses is still high, but for normal properties the market has almost stopped. We heard from our Beijing office that the transactions on ordinary properties had dropped from 160 per month to as low as 10 to 12 per month in the past two months.
“But for luxury houses the demand is still high, showing that economic factors only affect normal people, not the super-rich.”
With few restrictions on foreigners wishing to buy property in Hong Kong, the future still looks bright for agents and developers looking to attract mainland clients to properties in the city.
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