South China Morning Post
The new mediation agency looks beyond dark Hong Kong and promises opportunities for the wider Gulf region
Amid a fourth wave of coronavirus cases in Hong Kong, the new property agency opened its doors on Wednesday riding on optimism about the wider Gulf development zone. The real estate market in Hong Kong won the pandemic, but Kenneth Kwok, co-founder of Xifeng Property Group, instead cashed in on lower retail rents and labor costs to open his 200-square-foot office in Mong Kok. He pays a monthly rent of about HK $ 15,000 (US $ 1,934), which is half of what it would have been at the time of the pre-pandemic. Noticing the growing demand for residential property in the Greater Bay area, Kwok and Jason Shum, its co-founder, decided to perfect this as their niche. Their venture comes amid rising house prices in Gulf towns. For example, according to an index compiled by real estate agency Centaline, prices of new and used homes in Shenzhen in November rose by fifteen months and rose by 32 percent. Check out the latest insights and analyzes from our Global Impact newsletter on great stories from China. Hong Kong retains the advantage as DHL’s air hub in the wider Gulf. Four cities – Guangzhou, Foshan, Shenzhen and Dongguan – last month saw house prices rise to their highest level since March 2016, when Centaline began collecting data in the development zone. is a Chinese government scheme linking Hong Kong and Macao with nine neighboring cities in Guangdong Province – including Guangzhou, Shenzhen and Zhuhai – to create an integrated economic and business hub. Transactions remained active in these nine mainland cities last month, especially with Shenzhen Centaline said the volume of first-hand transactions reached a five-year high. The volume of transactions in Hong Kong and house prices, however, dampened the fourth wave and is expected to remain under pressure. In the first few months of the pandemic, Kwok noted that most buyers in Hong Kong did not like to buy property from mainland China because the coronavirus was first reported. “Half a year later, people in Hong Kong are buying land again, even though they can’t visit it. If we can provide them with live videos via WeChat to communicate with onshore vendors, there are customers who will buy, “he said, adding that the agency planned to target middle-aged people over the age of 40.” It’s time to start a business – costs are lower, but demand [for mainland property] is increasing, “he added. Kwok acknowledged the competition presented by large property agencies and pointed to projects his agency had, such as 400- to 500-square-foot apartments in Dongguan for HK $ 500,000 ($ 64,495) and claiming that return rates as high as 6 percent .And while advocating for greater interest from Hong Kong customers, Andy Lee Yiu-chi, Centaline’s chief executive for southern China, said such demand is likely to be reduced by pandemics and resulting travel restrictions. ” established quarantine restrictions, most Hong Kongers cannot return to the mainland to buy real estate. I believe there could be a reduction in the number of Hong Kongers buying land real estate from 70 to 80 percent this year, “Lee said. There could be a small proportion of investors making purchasing decisions from Hong Kong, but Lee said such a scenario would was probably for real estate priced between one million yuan ($ 152,907) and 2 million yuan.Lee said he expects more buyers from Hong Kong to buy land real estate from the second half of next year if the coronavirus pandemic is curbed. in the Gulf is currently supported by the favorable policy of the Hong Kong government, he said, especially as the Gulf Area has taken center stage in CEO Carrie Lam Cheng Yuet-ngor’s annual address this year.Lam highlighted integration with the Gulf area as a city priority along with major transport projects to improve cross-border connectivity.Zhuhai and Zhongshan have become popular cities in the bays due to property , Kwok suggested, due to accessibility thanks to transport links such as Hong Kong-Zhuhai-Macau Bridge. House prices in Zhongshan fell 1 percent year-on-year in November, while Zhuhai saw growth of 0.7 percent over the same period. Lee backed Kwok’s election and added Zhaoqing, which recorded a drop of about 3 cents year on year in house prices, to the list of cities to keep in mind. Although residential property in Shenzhen used to be a favorite, Lee said rising house prices, which have recently risen to as much as 50,000 yuan per square meter, have made the city inaccessible to Hong Kong buyers. Instead, investors could flock to cities such as Zhuhai, Zhongshan and Zhaoqing for properties priced at about 1 to 2 million yuan, compared to 5 to 10 million yuan in Shenzhen, he added. More from the South China Morning Post: * Chinese private education operators expand the wider Gulf area as the economic hub attracts more talent and resources * clearer licensing rules, wider Gulf opportunities can turn Hong Kong into a family hub, say industry players Area opportunities for the first time appeared on the South China Morning PostFor the latest news from the South China Morning Post, download our mobile app. Copyright 2020.