Mainland companies have invested HK$36.1 billion in Hong Kong’s property market in the first quarter of this year, a two-fold increase from a year earlier, Colliers International said in a research report.
Antonio Wu, Colliers’ deputy managing director of capital markets and investment services, said the yuan’s depreciation against major currencies has prompted mainland developers to invest overseas as a hedge against foreign exchange risks.
“Land prices [in Hong Kong] will eventually be determined by demand and supply after the government launches more plots [for sale],” he said.
Wu said local land and property prices would probably stay at high levels because of low land supply.
He predicted prices in the mass residential market to rise by 8 percent this year and by 3 percent for luxury flats.
He said Hong Kong might outstrip New York this year in terms of preferred overseas location among Chinese enterprises.
Colliers research director Daniel Shih said property curbs in China were likely to encourage more mainland developers to acquire land in Hong Kong.
“This will threaten the market share of local developers, especially small- to medium-size developers,” he said.
Meanwhile, Wing Tai Properties (0369) and Nan Fung Group have scrapped their cash rebate offer for the last 10 flats in their Homantin Hillside project.
They said the rebate was not necessary, with robust demand in the luxury home market.