HK investors just not prepared to miss out

(CHINADAILY)HongKongpropertyinvestorsareseekinghigherreturnsbypurchasingapartmentsincitiesaroundShenzhenwherehomespriceshavegonethroughtheroof,particularlyinthepastyear.

AHongKongresidentsurnamedChuiboughta77-square-meterservicedapartmentinZhuhai’sGongbeidistrictlastyearfor2.7millionyuan($417,000)forherownuse,butthepropertycannowfetchhera6-percentrentalyieldreturnifshechoosestoleaseitout.

Dongguan,ZhongshanandZhuhaihavetraditionallybeenthefavoritepicksofHongKonghomesbuyerswhousedtheirapartmentsthereforleisureandretirementinthepast.But,nowmoreHongKongpeopleareturningtothepropertyinvestmentpotentialinthesecities.

PropertyagentstoldChinaDailythathomespricesinZhuhai,DongguanandZhongshan,afterhavingsoared10to15percentlastyear,aresettogoupbyanother20to30percentinthenextthreeyears.

Atpresent,aresidentialapartmentinDongguancosts9,000yuanpersquaremeter,comparedwith7,000yuaninZhongshanand16,000yuaninZhuhai.

"Loosemonetarypoliciesonthemainlandandaroundtheworld,thecentralgovernment’ssupportivepoliciesforthepropertymarketinsecondandthird-tiercities,aswellasmajorupcominginfrastructureprojects,willboostpropertypricesinDongguan,ZhongshanandZhuhai,”saidAndyLeeYiu-chi,vice-president(Chinesemainland)andchiefexecutiveofficer(SouthernChina)atCentalinePropertyAgency(China).

TheHongKong-Zhuhai-MacaoBridgeandtheShenzhen-ZhongshanBridge,whichareduetoopenin2018and2023,respectively,areexpectedtoboosttransportlinksbetweenHongKong,ShenzhenandthesurroundingcitiesinthePearlRiverDelta.

Currently,HongKongclientsaccountfor3to7percentofallCentaline’spropertytransactionsinDongguan,ZhongshanandZhuhai,accordingtoCentalinePropertyAgency(China).

However,somerealestateagentsstillthinkthatpropertyinvestmentsinShenzhenremainmoreattractive.

"Shenzhen’seconomicactivitiesaremorevibrantwithmanyblue-collarworkersandwhite-collarprofessionalsfromotherprovinceslivingandworkinginthecity,creatingtremendousleasingdemandforresidentialproperties,”saidTongChongChun-kao,Century21Group’sChinasalesdirector.

AccordingtoglobalrealestateadvisoryfirmCBRE,HongKongpropertyinvestorsshowgreaterinterestinmarketsoutsidetheAsiaPacificregion,andplantoinvestmoreabroadthisyear.But,theChinesemainlandisstillthemostpopularmarketforcross-borderpropertyinvestments.

"Lastyear,capitaloutflowfromHongKongtorealestatemarketsworldwidegrewsignificantly—by49percentyear-on-yearto$10billion.Weexpectthetrendtocontinuein2016withsustainedinterestfromHongKonginvestorsindiversifyingtheirglobalrealestateportfolioforhigherreturns,”saidYuKam-hung,investmentpropertiesseniormanagingdirectoratCBREHongKong.