For the younger generation of mainlanders working in Hong Kong, the issue of property ownership has been causing a lot of heartburn.
Many Chinese mothers believe a married man should have his own house. If one doesn’t have a property to his name, he may not be able to take care of his family, goes the popular thinking.
Now, how does one pass the bar in a place like Hong Kong where housing prices are exorbitant? This is the question that is occupying the minds of many mainlanders living in the territory.
The problem has become more acute as the Hong Kong government implemented some measures three years ago to discourage speculative purchases by non-locals.
A 15 percent Buyer’s Stamp Duty and a special stamp duty with floating rates have raised the costs for overseas citizens wishing to buy homes in Hong Kong.
It’s hard to say if the tightened policy has sapped the appetite of moneyed investors from north of the border, but it certainly has hit the working-class mainlanders living in the city.
One needs to reside for at least seven years to qualify for permanent residency and exemption of the tax.
Given the high costs of owning a home — a non-local needs to pay as much as HK$600,000 (US$77,391) in tax for a HK$4 million entry-level flat — most mainlanders in their 30s and 40s have no choice but to opt for rental apartments.
But that is seen as less than an optimal solution. In the dictionary of mainlanders, a rented home is never a home: you feel insecure living in a place you do not own.
Such mindset is especially a source of anxiety for those who are married. Another thinking that prevails among them is that renting a home means helping the landlord accumulate wealth, rather than helping oneself.
So, what is the solution?
How about buying a place in Shenzhen and doing regular commutes to Hong Kong?
Well, this is exactly what some people have been doing recently.
The Hong Kong Economic Journal reported last month that 600 units at Tiara (天頌), MTR Corp’s first property development project in Shenzhen, were snapped up almost fully on the launch day of sale.
According to real estate agents, many of the buyers were Chinese nationals living in Hong Kong.
The smallest unit at the estate, which lies above the depot of the Longhua Line, is said to be about 89 square meters in size, fairly decent by Hong Kong standards.
More importantly, the price tag was just HK$3.6 million.
In Hong Kong, that money would probably fetch you only a small place in a remote location in northern New Territories or a cramped flat in a rundown old tenement building.
China Business News notes that developments along the Longhua Line, which runs from the north through Shenzhen’s built-up areas to the border checkpoint, now draw a cluster of homeowners who work in Hong Kong.
A newly-built condo near Shenzhen North Railway Station that the Longhua Line serves now goes for 30,000-40,000 yuan per square meter on average. The price is much higher than before but still cheaper compared to properties in Hong Kong.
Given the realities of the market, the trend of mainlanders in Hong Kong buying homes in Shenzhen and commuting between the two cities will only grow in the coming years.
That said, the solution is not all perfect.
Shenzhen homes are cheaper, but it’s still hard for many buyers to pay the full amount in cash.
And people who are not employed in Shenzhen may not be able to get a mortgage. And even if they can, the maximum cover is capped at a lower level.
If the mainlanders use their Hong Kong identity cards to make purchases, they are treated as foreigners and subject to extra paperwork and red tape.
Who says life is easy!
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