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The untold techniques for smart China property investors

Damon Ho

Since border reopening, Hong Kong peoples’ suppressive demand to travel overseas are fully recovery. Macao and Shenzhen which are Hong Kong adjacent city firstly had been benefiting from the strong expenditures of Hong Kong peoples.

Those cities are crowded with tourists in tourist attractions, restaurants and souvenir shops. In addition, mainland property developers start to provide new projects to draw Hong Kong peoples’ attention and hope to close the deals as much as possible.

After three years of border closure, China   property market has been undergoing in a downturn. Moreover, newly completed first-hand projects have acuminated to high level so most developers cut the sales price to attract market attention. The long-gone Hong Kong customers have retuned to the market and have found the discounted home prices which are very attractive.  

Nowadays, many well-known China property companies have been suffering from excessive debts, and their new projects are still in danger of incompletion. As smart investors, one should be very careful to avoid to purchase such kinds of these new projects.

If one really want to purchase, only choose to buy the projects of central enterprises or state-owned enterprises. To further reduction risks, it is best for the buyers to purchase completed premises. In fact, the risks of buying incomplete projects are uncontrollable.

In addition, Hong Kong buyers should refuse to purchase of concept homes, such as the projects in future hub, adjacent to the new highway or the location of a new bridge entrance. However, most of these projects are located in remote areas and are lack of basic facilities to support normal life. Besides, the rental markets are also inactive, so even the owners rarely move in after the completion of these projects. Finally, these projects quickly becomes another semi-ghost town.

The most valuable property in China are basically the same as in Hong Kong, which are the famous school district premises. If the new developments are located in the good school districts, the property price and rental value are guaranteed. Taking Zhuhai as an example, since last year, the housing price in famous school districts have adjusted down by 5 to 10%. On the other hand, the adjustment prices in bad credit school districts have come down more than 20%.

In order to increase its chances to changing hands of these units, one should try to buy a small sized three-bedroom and two-toilets unit, of which the area is less than 100 square meters (1,000 sq.ft.), such urban small three-bedroom is exactly the basic domestic demand. The total prices of these units are lower and the location are convenient. Furthermore, these units’ leasing and sales market are very active, so they are more easier to cash out.

Hong Kong emigrants to China should understand that the majority of these retirees will move back to Hong Kong when they are over 75 years old due to health problems. In fact, the free and quality medical treatment in Hong Kong is no substitute in China. If Hong Kong retirees wrongly bought in inactive mainland properties, this will seriously weaken their financial income in old age.

 
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1. Hk cpi shrinks to 1.7% 2023-04-29 16:41:41

Hong Kong's Consumer Price Index (CPI) decreased to 1.7% in March 2023 from the average of 2.1% in January and February of the same year. The city's underlying inflation rate, netting out the effects of the local government's one-off relief measures, also hit the 1.7% mark, virtually the same as that in February.

Data from the city's Census and Statistics Department also stated electricity, gas, and water (19.9%) had a sizeable year-over-year increase in prices amongst Composite CPI's components, followed by alcoholic drinks and tobacco (18.7%), clothing and footwear (6.3%), meals out and takeaway food (4.5%), transport (2.8%), miscellaneous services (2.7%), and miscellaneous goods (1.0%).

2. accom boost private interest in NMT 2023-04-29 17:41:41

A local government accommodation scheme in Shanghai could boost private interest in Hong Kong’s Northern Metropolis and solve housing issues before they arise.

As China continues to industrialise, it continues to urbanise. China’s National Statistics Bureau notes that by the end of last year, 65.2% of its 1.4118 billion population was urbanised and that by 2035, 75.3% would be living in cities. Population forecasts by Yuwa, a group of academics focusing on national population issues, indicate that by the end of 2035, China’s population will reach 1.13 billion, meaning some 850,890,000 people will live in urban space.

3. Grade A Office's vacancy rate declines 2023-04-30 07:31:16

Border reopening led to the first decline in the vacancy rate of , Grade A Office which fell 12% in March 2023, JLL said in its report.

This is the first decline in 10 months, JLL also said.

The Grade A offices' overall vacancy rate edged down from 12.2% at the end of February to 12.0% at the end of March. 

The vacancy rate in Wanchai / Causeway Bay and Kowloon East fell to 9.6% and 19.3%, respectively, whilst Central's vacancy rate remained flat.

4. Restaurants are positive about F&B industry 2023-05-01 17:06:45

Restaurants in Hong Kong are positive about the performance of the food and beverage industry as 70% of those surveyed expressed confidence about the outlook for the sector in the second quarter, up from 51% previously.

In a report, Deliveroo said business satisfaction has increased to 6.5 from 6.1 in the last three months of 2022 as the market’s border reopened with the lifting of pandemic restrictions.

Around 64% of restaurants posted an increase in revenue from dine-in business with the return of economic activities, whilst revenue from takeaway remained unchanged or even increased for 59% of the respondents.

5. Macau's casinos gained traction in April 2023-05-02 10:06:39

A recovery for Macau's casinos gained traction in April, with gross gaming revenue climbing 449.9 percent to hit a three-year high of 14.7 billion patacas (HK$14.3 billion) as Chinese tourists flocked in.

Data from the Gaming Inspection and Coordination Bureau yesterday showed figures better than a median analysts' estimate of a 393-percent year-on-year increase and the highest monthly takings since January 2020.

But it was still at least a third below the 2019 level.

6. Starbucks business rebound as China recovery 2023-05-03 12:24:13

Starbucks posted stronger-than-expected sales in its fiscal second quarter as demand in China began to recover, but the company said that sales growth could moderate as the year progresses. 

The Seattle coffee giant said Tuesday that its net revenue jumped 14 percent in the January-March period to US$8.72 billion. That was better than the US$8.41 billion Wall Street had forecast, according to analysts polled by FactSet. 

Same-store sales — or sales at stores open at least a year — rose 11 percent as traffic picked up in stores. 




7. Labour Day “golden week” Draw 1.7 mil travellers 2023-05-04 12:21:15

More than 1.71 million travelers poured into Hong Kong during the mainland’s five-day  Labour Day “golden week” holiday that ended Wednesday, with some 625,000 - or around 37 percent of them being mainland tourists.

Immigration Department figures showed that the proportion of mainland travelers this year has dropped when compared to pre-pandemic times, which in 2019, up to 63 percent of the incoming travelers were from the mainland.

The Travel Industry Authority said 453 mainland tour groups have registered their trip to Hong Kong during the ‘golden week,’ involving around 13,000 tourists.

8. Transactions fell 33% in March 2023-05-04 18:45:56

The Land Registry documented 5755 sake and purchase deals for all building units received for registration in April.

It declined 33.1% compared with March and 18.6% higher year-on-year (YoY), read the statement.

The total consideration for such agreements declined 7.5% from March to $63.7b in April, whilst a 52.5% YoY increase was recorded. 

Of the agreements, 4,583 were for residential units, down 31.5% from March and 17.6% higher than a year ago.