Hongkongers eye deals in Greater Bay Area city Zhongshan, turn to the internet to buy property

By Sandy Li sandy.li@scmp.com / https://www.scmp.com/business/article/3097688/hongkongers-eye-deals-greater-bay-area-city-zhongshan-turn-internet-buy?utm_medium=partner&utm_campaign=contentexchange&utm_source=EdgeProp&utm_content=3097688 | August 25, 2020 12:06 PM SGT
Property investors from Hong Kong are not letting coronavirus social distancing measures and closed borders get in the way of a promising deal in the Greater Bay Area development zone.
Aiko Lo, in her mid 30s, and her husband recently bought a holiday home in Zhongshan, one of the nine mainland Chinese cities included in the zone, without leaving Hong Kong.
Held back by the coronavirus pandemic initially, they decided to explore new projects on the internet while stuck at home. Last month, they finally bought a 1,200 sq ft unit in Times Xianghai Bian, which has been built by Hong Kong-listed mainland Chinese developer Times China, online for HK$1.5 million (US$193,538) at the office of V+ Property, a small agency in Lai Chi Kok, in Kowloon.
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"We saw the health crisis is an opportunity to buy, as prices will rebound when the coronavirus is contained," Lo said.
Hong Kong investors spent about 40 billion yuan (US$5.7 billion) on homes in the development zone last year, an increase of 300 per cent from the 10 billion yuan they spent in 2018, according to Andy Lee Yiu-chi, the chief executive for southern China at Centaline Property Agency. Meanwhile, Zhongshan's home prices have fallen by about 15 per cent from a peak in August 2018 according to the property agency's Greater Bay price index. Interest in Greater Bay Area property will only rise once the pandemic is contained, analysts said.
"We have sold 100 units every month since launching online sales in May," said Stephen Sum, an investment consultant at V+ Property.
The agency, which focuses on selling property in the development zone to Hong Kong buyers, has been rescued by the online sales. "At the height of the pandemic in March, our transactions were close to zero. It has been an extremely painful time for our business," Sum said.
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The online purchase of property is becoming more common in mainland China. "I saw investors from Shanghai buy homes in Zhuhai via the internet, and thought, why not copy this model in Hong Kong? Sum said. The agency's clients have so far been focusing on homes worth between HK$1 million and HK$3 million in the cities of Zhongshan, Zhuhai, Huizhou and Foshan.
Centaline China, Centaline's mainland unit, which is the largest agency selling mainland Chinese homes to Hong Kong investors, on the other hand, said it was "immature" to launch an online sales channel, as the sales were not significant.
"We have everything ready for when online sales of homes in China become popular in Hong Kong. We have the software for signing deals online ready. But it is still immature to launch this channel, as the number of such transactions is insignificant," Sherman Lai, Centaline China's chairman, said. The agency has 700 outlets in the nine mainland Greater Bay Area cities, and accounted for about 17 per cent of the 1.43 trillion yuan in home sales recorded last year.
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Currently, most Hong Kong investors use the internet for research purposes only, and the agency was posting details of mainland projects on its website to draw these potential buyers, Lai said.
The agency will step up efforts to promote Greater Bay Area property once the pandemic recedes. "We are marketing close to 1,000 new projects in China, but are only offering a small number in Hong Kong. We will, however, increase our sales to tap the growing demand from Hongkongers," he said.
The project Lo and her husband invested in is about 90 minutes from Hong Kong via the Hong Kong-Zhuhai-Macau Bridge and might be delivered as early as this month.
"We selected the flat via video - a V+ Property agent in Zhongshan showed us the actual unit from different angles, as well as facilities such as the club house and the locality. We decided to buy the apartment after feeling satisfied by the project's quality, its location and, more importantly, its price," Lo said.
She paid for the flat through a mainland bank account. "We signed the documents in front of a lawyer representing the developer in Zhongshan via a video call. The whole deal was done online," she said, adding that the developer sent them the contract by speed post.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2020 South China Morning Post Publishers Ltd. All rights reserved.
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