Hongkongers are snapping up properties on the mainland despite government measures to cool down the sector, with neighboring Shenzhen being their most popular choice.
From January to September, as many as 17,200 mainland properties were bought by Hong Kong people for a total of 108 million yuan (US$13.5 million), according to Land Power International, a leading Hong Kong property service firm.
Transactions made in the last quarter will bring the total number of purchased properties to 23,150, worth a total of 145 million yuan (US$18.1 million), predicted Land Power Chairman Michael Choi.
Although Hongkongers bought 3 percent fewer properties on the mainland in the first three quarters of the year, the overall transaction value increased 15 percent.
"Third-quarter figures show that Hongkongers' buying spree on the mainland remains high," said Choi.
After May, the implementation of a raft of taxation and administrative measures by the central government caused property buyers to exercise greater caution.
Many Hong Kong people shelved their purchase plans at that time, particularly in Shanghai.
But "the market atmosphere has improved since September. Properties in Shenzhen and Guangzhou started to regain growth momentum, while prices in Shanghai, Beijing and Nanjing have started to stabilize," he said.
About 70 percent of Hong Kong's homeowners said they would consider buying real estate on the mainland, with 45 percent of them saying they would lease the property.
Eyeing Hongkongers' demand, mainland property developers have stepped up their promotional activities in the special administrative region.
A total of 75 mainland property projects were introduced to Hong Kong residents in the first three quarters, with most being from Shenzhen, the Pearl River Delta region and Shanghai.
Shenzhen, the neighboring city of Hong Kong, will remain the top choice for Hong Kong purchasers, followed by Guangzhou and Shanghai.
According to a survey conducted by Land Power, 35 percent of respondents said they would purchase a property in Shenzhen for work purposes, as increasing numbers of Hongkongers get jobs on the mainland.
Improved transport links between Hong Kong and Shenzhen have also encouraged more Hongkongers to buy second homes in Shenzhen, where property prices may be one-fifth of those in Hong Kong.
Meanwhile, 29 percent said they would buy homes in Shenzhen as an investment.
They generally expect a 4 to 8 percent return from their investments.
Professionals, managers, the self-employed and businesspeople accounted for 34 percent of the Hongkongers who bought properties in Shenzhen in the first three quarters of this year, while housewives and retired people accounted for 10 percent.
(China Daily October 27, 2006)