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Nicholas Spiro
The View
Nicholas Spiro

Why Chinese wealth is still powering Hong Kong and Singapore property

The draw of safe-haven assets in these cities sees more Chinese becoming permanent residents – a trend Beijing’s clampdown on capital outflows may even encourage

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A view of residential buildings in Hong Kong. In Hong Kong and Singapore, many mainland Chinese buyers have become a key source of domestic demand in the property market. Photo: Reuters
Nicholas Spiro
Nicholas Spiro is a partner at Lauressa Advisory, a specialist London-based real estate and macroeconomic advisory firm.

Hong Kong’s residential real estate market is roaring back to life. Prices for second-hand properties have risen 18 per cent since March last year, while average rents continue to hit new highs. The number of units sold in the primary market in the first half of this year reached a 22-year high.

According to Knight Frank, which tracks sales of “super-prime” properties above US$10 million in 12 leading residential markets, Hong Kong was the second-most widely traded market in the first quarter of this year as “global private capital remain[ed] highly active where liquidity, lifestyle and long-term confidence align”.

Yet confidence was shaken by Beijing’s measures to stem capital outflows from the mainland, which reached a record high of US$807 billion last year, data from the Institute of International Finance shows. The crackdown, which included penalties imposed on three prominent brokerages often used by ultra-high-net-worth Chinese to invest offshore, has put the surge in mainland capital inflows into Hong Kong under scrutiny.
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