Chinese in rush to sell off HK homes
A growing number of wealthy Chinese are rushing to sell their luxury homes in Hong Kong, with some even offering big discounts for a quick sale, on the back of a looming liquidity crunch on the mainland, stated media reports.
These same cash-strapped sellers were blamed for the skyrocketing property prices in Hong Kong, where they accounted for 43 percent of new luxury home sales in Q3 2012, prior to the introduction of a tax hike on foreign buyers.
The selling frenzy emerged after property prices were predicted to decline by 10 percent this year as rising borrowing costs and higher tax dampen demand. In addition, China also saw tighter credit conditions. Concerns of a growing financial risk heightened following reports that a Chinese developer, which owes 3.5 billion yuan, is at risk of bankruptcy.
“Some of the mainland sellers have liquidity issues – say, their companies in China have some difficulties – so they sold the houses to get cash,” noted Norton Ng, account manager at a Centaline Property branch near China’s border, where high-end homes costing up to HK$30 million (S$4.9 million) have been popular with Chinese buyers.
Property agents revealed that almost a third of homes now up for sale in the former British colony are owned by mainland Chinese.
The majority are offering discounts of five to 10 percent below the market average and in some instances as much as 20 percent, said agents and analysts.
“The most important thing for them is to sell as soon as possible,” said Richard Chan, branch manager at Centaline Property in West Kowloon.
“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,” he added.
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