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Mainland investors buy HK flats
( 2003-08-20 14:53) (China Daily HK edition)

Real-estate agents have joined retailers, hotels and restaurants owners in hailing the strong rebound in mainland tourists.

Some of these visitors, skirting mainland foreign currency controls, are bringing capital into Hong Kong's property market.

"Allowing individual travellers from Guangdong cities to visit Hong Kong has resulted in an increase in demand for property flats along the railways and in the New Territories," said Eddie Yuen, sales director of Centaline Property Agency.

Citing a case in point, he said a mainland traveller who visited on individual status snapped up five Home Ownership Scheme flats, located at Choi Po Court in Sheung Shui, in a lump sum for an aggregate cash price of HK$2.64 million (US$338,461) over the weekend, the largest deal in the area in recent years.

The mainland buyer bought the flats for lease, each with an area of around 489 square feet. The rental yield is estimated at about 8 per cent a year, compared with the current market average of 5 per cent.

The affluent mainland buyer is not alone in contributing to a flow of mainland capital via travellers that is quasi-illicit.

According to Centaline, the number of people visiting sample flats in New Territories rose by at least 10 per cent in the last weekend as compared with the whole month of July, 20 per cent of whom were mainland visitors.

"The trend is expected to continue with the relaxed travel policy being extended to three more Guangdong cities on August 20 and to Beijing and Shanghai next month," Centaline's Yuen said, adding the agency was considering arranging special services to the growing mainland buyers.

As a matter of fact, the recent boost in travel policy for mainland tourists, the Closer Economic Partnership Arrangement (CEPA) as well as the new scheme for skilled mainland workers and professionals launched last month all gave a shot in the arm of the property industry, analysts said.

"All these mainland-related factors, including the integration of the Greater Pearl River Delta and the future Hong Kong-Zhuhai-Macao bridge, are external impetus to the real estate market," said Adrian Ngan, property analyst of BNP Paribas Peregrine.

According to Ngan, the improving overall economy, the tightening house supply and the picking-up demand will push up the property prices, which have declined by 65 per cent from the peak in 1997, at the end of the year.

Lau Ka-fai, chief analyst of Midland, shared similar views with Ngan and pointed out that the new mainland talent scheme, which allows professionals to bring their spouses and children to live with them in Hong Kong, would increase demand for residential flats in the long run, though the profits were by no means imminent, given the small number of successful applicants so far.

"Mainland professionals will first consider renting flats when they come to work and live in Hong Kong, which helps invigorate the lease market," he said. "If the number of successful applicants are growing significantly, it will definitely give an impetus to the residential real-estate market in the future."

 
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