Hong Kong protests fuel buyer interest in Australia, New Zealand luxury homes

SYDNEY - Hong Kong buying enquiries for expensive Australian and New Zealand homes have ramped up due to anti-government protests in the Chinese-ruled city, according to property agents and real estate data, as wealthy investors look for a safe haven.

Jamie Mi, partner at Melbourne-based Kay & Burton, said the real estate agency was receiving about one-third more enquiries from Hong Kong buyers than usual, with most buyers targeting high-end properties priced above A$5 million ($3.4 million).

She said the protests in Hong Kong had "accelerated the motivation" in the past month for wealthy buyers to look for residential properties to move their money into.

The protests, triggered earlier this year by a proposed extradition bill that would allow individuals to be sent to mainland China to face trial in courts controlled by the Communist Party, have become more violent in recent weeks.

Police for the first time used a water cannon to combat protests on Sunday, while some protesters threw petrol bombs at police.

Juwai.com, China's largest international property website, recorded a 50 percent increase in Hong Kong enquiries for Australian properties in the past quarter.

"In the current environment, Australia appears as a safe harbor — both comfortably close and far from home," Juwai.com executive chairman Georg Chmiel said in a statement to Reuters.

Buying real estate in Australia and New Zealand does not grant Hong Kong investors residency.

Several real estate agents said the buying enquiries are likely coming from wealthy foreigners who are already allowed to reside in Australia or New Zealand and who are possibly planning an exit strategy from Hong Kong.

Australia is seeing an increase in interest in its millionaires-only visa program from wealthy Hong Kong residents who are eyeing a safety net amid political turmoil in the Chinese-ruled territory.

Under the program, people can obtain a provisional visa if they invest at least A$5 million ($3.4 million) into complying investments in Australia.

New Zealand has similar investor visas that require a minimum NZ$3 million ($1.9 million) spend.

Another factor behind the spike in buying enquiries in Australia and New Zealand is the economic impact the protests are having on the Asian financial hub, which is now facing its first recession in a decade.

James Chan, from Bayleys Real Estate in New Zealand, said enquiries had been ticking up ever since the protests intensified. "They are starting to think about how to protect their money - they need to look for a safe haven," he said.

Official figures suggest the overall level of foreign home buying in New Zealand is relatively low - about 3 percent of property transfers nationwide - however the data does not capture property bought through trusts.

Australia's property sector has long been a favored destination for foreign buyers, especially Chinese, although demand has been tempered in recent years by rising state taxes on foreign purchases.

Australia and New Zealand have also introduced tighter regulations on foreign purchases of established homes in recent years, pushing Chinese investors towards new apartments.

Government data on foreign property investment for 2018-19 has not yet been published. The year before, Chinese investors were by far the single biggest group of foreign buyers of Australian real estate, accounting for A$12.7 billion ($8.6 billion) in purchases. Hong Kong investors spent A$2.8 billion ($1.9 billion) that year. ($1 = 1.4806 Australian dollars) ($1 = 1.5620 New Zealand dollars)

source: news.abs-cbn.com

Why Chinese are selling their luxury homes in HK

HONG KONG - Cash-strapped Chinese are scrambling to sell their luxury homes in Hong Kong, and some are knocking up to a fifth off the price for a quick sale, as a liquidity crunch looms on the mainland.

Wealthy Chinese were blamed for pushing up property prices in the former British territory, where they accounted for 43 percent of new luxury home sales in the third quarter of 2012, before a tax hike on foreign buyers was announced.

The rush to sell coincides with a forecast 10 percent drop in property prices this year as the tax increase and rising borrowing costs cool demand. At the same time, credit conditions in China have tightened. Earlier this week, the looming bankruptcy of a Chinese property developer owing 3.5 billion yuan ($565.25 million) heightened concerns that financial risk was spreading.

"Some of the mainland sellers have liquidity issues - say, their companies in China have some difficulties - so they sold the houses to get cash," said Norton Ng, account manager at a Centaline Property real estate office close to the China border, where luxury houses costing up to HK$30 million ($3.9 million) have been popular with mainland buyers.

Property agents said mainland Chinese own close to a third of the existing homes that are now for sale in Hong Kong - up 20 percent from a year ago. Many are offering discounts of 5-10 percent below the market average - and in some cases as much as 20 percent - to make a quick sale, property agents and analysts said.

"GHOST TOWN"

In a Hong Kong housing development called Valais, about 10 minutes drive from the Chinese border, real estate agents said that between a quarter and a half of the 330 houses are now on sale. At the development's frenzied debut in 2010, a third of the HK$30-HK$66 million units were sold on the first day, with nearly half going to mainland China buyers.

Dubbed a "ghost town" by local media, the development built by the city's largest developer, Sun Hung Kai Properties Ltd, is one of many estates in Hong Kong where agents are seeing an increasing number of Chinese eager to sell.

"Many mainland buyers bought lots of properties in Hong Kong when the market was red-hot three years ago," said Joseph Tsang, managing director at Jones Lang LaSalle. "But now they want to cash in as liquidity is quite tight in the mainland."

A spokesman for Sun Hung Kai said the current occupancy rate at Valais was 75 percent, and most of the second-hand units for sale were "looking for a good selling price and not eager to sell at deep discounts."

CASHING OUT
In a nearby development called The Green - developed by China Overseas Land & Investment 0688.HK - about one-fifth of the houses delivered at the start of this year are up for sale. More than half of the units, bought for between HK$18 million and HK$60 million, were snapped up by mainland Chinese in 2012.

China Overseas Land was not immediately available to comment.

"Some banks were chasing them (Chinese landlords) for money, so they need to move some cash back to the mainland," said Ricky Poon, executive director of residential sales at Colliers International. "They're under greater pressure from banks, so they're cutting prices."

In West Kowloon district, an area where mainland Chinese bought up close to a quarter of the apartments in many newly-developed estates, some Chinese landlords are offering discounts on the higher-end, three- to four-bedroom apartments they bought just a few years ago.

This month, a Chinese landlord sold a 1,300 square foot (121 square meter) apartment at the Imperial Cullinan - a high-end estate developed by Sun Hung Kai in 2012 - for HK$19.3 million, 17 percent less than the original price. The landlord told agents to sell the flat "as soon as possible," said Richard Chan, branch manager at Centaline Property in West Kowloon.

In the same area, a 645 square foot, 2-bedroom flat in the Central Park development was sold in just two days after the Chinese owner put it on the market at HK$6.5 million in what agents called the year's best bargain - the cheapest price for a unit of its kind over the past year.

"The most important thing for them is to sell as soon as possible," Centaline's Chan said. "In the past two weeks, those who were willing to cut prices were mainland Chinese. It is going to have some impact on the local property market, that's for sure."

source: www.abs-cbnnews.com