The Big Bay Area is an investment concept as hot as the current weather in the southern part of China.
The Hong Kong-Macau-Zhuhai Bridge and the cross-border high-speed rail — both due to open this year — will draw Hong Kong and China closer as the infrastructure will cut travel times significantly.
Meanwhile, there is intense speculation as to whether Hong Kong or Shenzhen, or both, will take the lead in innovation and technology development going forward.
Amid this situation, Hong Kong people have begun looking at investment opportunities across the border with greater interest.
Well, that is especially the case with residents who feel they are getting older and could do with a more relaxed lifestyle, not to mention a less expensive place in terms of living costs.
If for the price of a car-park in Hong Kong, one can get a 1,000-square-foot flat in Guangdong’s outer areas, and that too lots of choices, it definitely makes sense investing there, people reckon.
Asset managers would probably tell you that there is no better asset than property that is correlated to GDP expansion. As such, there is no better way to play China’s Greater Bay Area project other than investing in property.
With such thoughts this in mind, I made a trip to Guangdong province last weekend, accompanied by a friend who is an experienced China investor.
We visited Zhongshan, Foshan and Nansha, trying to get a grip on the property markets there and scouting for potential capital appreciation opportunities.
We liked what we saw because the Big Bay Area, formally referred to as the Greater Bay Area, has much to offer.
If you have a budget slightly above a million yuan, you are presented with different choices, ranging from a retirement home in Zhongshan, a loft studio in Foshan high-tech park area and a property in the booming core business district in Nansha.
In Nasha, we found that almost every residential site is promoted in relation to the Bay Area theme, with agents pointing out that it takes just an hour to travel from there to all the other cities covered under China’s Greater Bay plan.
While there are interesting choices, you may, however, find that it may not be possible to buy the property you want unless you can provide social insurance proof.
That is because of property-purchase restrictions in some Foshan and Zhongshan areas, as well as the whole of Nansha.
Here we come to a tricky part, as most of the residential sites have a counter measure against the national policy. Agents would advise customers to use a company for purchase and date back completion of the transaction a year after the full payment.
Besides, they would suggest that buyers opt for service apartments, as the category comes without restrictions. A service apartment is about half price of a regular residential unit, but will come 40-year usage, as opposed to 70-year usage rights in residential flats.
Well, who know what will happen after 40 years of lease! That said, it’s possible that the Chinese government would only add on a small tax to allow continued usage.
Rewards always come with risks. Hong Kong has a perfect legal system to protect homebuyers but properties here come with sky-high price tags. China, one the other hand, has an affordable housing market from the perspective of many Hong Kong people, but the legal risks are much higher.
Let’s hope that there will be clearer direction from Beijing on whether it will grant exemptions and encourage Hong Kong people to buy homes in the Big Bay Area.
Will we see some positive announcements as early as next week when authorities unveil further measures to help Hongkongers embrace the Greater Bay Area concept?
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