Hong Kong’s interest in Australian property surges following protests, unrest

The Australian property market could soon become the beneficiary of an influx of Hong Kong nationals wanting to leave their homeland amid months of protests and chaos.

Nearly two million people took to the streets on June 17 to protest against the Hong Kong government’s controversial plan to pass a bill that would allow a citizen to be extradited to China to face trial under their Communist legal system.

While Hong Kong’s Chief Executive Carrie Lam has assured citizens the extradition bill is “dead,” the majority of the population isn’t buying what she’s selling and have promised to keep up the fight in protests that have turned violent in recent weeks.

Due to the unrest currently sweeping their city, a growing number of people are now considering investing in property overseas in order to secure their future beyond Beijing’s stranglehold or leaving Hong Kong altogether.

Although investment into the Australian property market has dropped a considerable 67 per cent since late-2016 from a peak of $72.4 billion in approvals mainly due to China’s crackdown on capital controls, Australia is still a very attractive destination for foreigners.

Despite the NSW government doubling the stamp duty surcharge for foreign buyers from 4 to 8 per cent in 2017 and the Victorian government raising their surcharge from 7 to 8 per cent earlier this year, agents are still reporting a sharp increase in interest in Australian property from Hongkongers.

“We have noticed an increase in inquiry from expat and Chinese buyers,” said Ken Jacobs, managing director of Christie’s International, but added it was too early to tell whether the interest will translate into sales.

Melbourne agent Jamie Mi of Kay & Burton has also reported a recent increase in interest in property in Victoria from Hong Kong buyers.

“We are expecting a new wave of investment from Hong Kong and Hong Kong-based expats in that $5 million to $20 million range,” she said.

“Hong Kong is usually an international stepping stone for investment out of mainland China to the rest of the world, so it is often Chinese buyers looking to move their funds from Hong Kong to other markets,” said Mi.

Immigration agents have also a reported a sharp rise in interest from Hong Kong nationals looking to relocate, with Australia, Canada and Taiwan currently the most popular destinations.

Hong Kong-based migration consultant John Hu who specializes in the Australian market told the Australian Financial Review that calls to his office have tripled in the last month following violent demonstrations.

“This has been going on for a while. There are a lot of good reasons why people leave Hong Kong. The recent protests are an accelerator,” said Hu.

“Hong Kong is the most expensive city in the world. After graduation, you have to work 20 years for your first home. Young people are looking to leave because they want an opportunity to improve their quality of life,” he said.

The news comes at a good time for the Australian market that has s of late started a recovery from its dire position over the past two years, with Housing Minister Michael Sukkar warning house prices will continue to rise in 2020 after the government’s First Home Buyer Deposit Scheme is introduced.

“We’re seeing green shoots in Melbourne and Sydney in the last quarter and I think with low interest rates, with APRA reducing serviceability buffers, all those factors combine to confirm that optimism,” said Sukkar.

A report from the Commonwealth Bank echoes this sentiment, finding that 91 per cent of first-home buyers believe owning a property is now within reach compared to a figure of 80 per cent this time last year.