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28/06/2011

 Banks have been instructed to tighten mortgage lending, but some analysts believe property prices in Hong Kong are impacted more by mainland capital.

 
There's a popular belief many mainlanders buy homes in Hong Kong just for the purpose of storing luxury handbags they buy here.
 
Someone well-known in political and business circles had an experience recently that might shed some light on the matter.
 
This heavyweight was traveling first class on a trip to China and noticed that he was one of only three passengers in that section.
 
The other two were a rich mainland lady and her maid. A second maid was seated back in economy class.
 
During meal time, the woman declined the airline food, and instead enjoyed that served by her maid.
 
Midway through dinner, the woman mentioned the names of two housing estates in Hong Kong, and asked the heavyweight which one was better.
 
Not knowing what she meant exactly, he asked whether she was buying for investment, or self use.
 
The rich lady said she often shopped in Hong Kong, and wanted a place to stash the luxury goods she purchased.
 
He said it depends on the district she visits most frequently, and what the traffic is like - whereupon the rich lady said in that case, she had better buy at both estates.
 
So, it seems stories about mainlanders buying homes as warehouses in Hong Kong are not just hot air.
 
Despite various cooling measures to combat speculation, flat prices remain high, prompting the authorities to announce further measures to tighten mortgage lending.
 
This has led some veteran analysts to surmise the property market has peaked, and some would-be local purchasers have become hesitant.
 
The latest development means our property market is becoming more dependent on mainland buyers.
 
In such a scenario, there are two logical extreme possibilities - either the mainlanders' buying power will dry up, or their capital supply is inexhaustible, meaning they'll continue to snap up the biggest chunk of Hong Kong properties. Siu Sai-wo is chief editor of Sing Tao Daily

SOURCE: THE STANDARD



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