Young Chinese Graduates Are Fueling Hong Kong's Property Boom
A student graduate poses for a photograph in front of residential homes at a public housing estate in Hong Kong on April 1, 2017. As Hong Kong struggles with the world’s priciest housing market, a shortage in supply is being exacerbated by mainland Chinese students who come to study and then decide to stay.
The graduates may help boost housing demand by 4,000 units a year in the medium term, estimates Nicole Wong, the regional head of property research at CLSA Ltd. in Hong Kong. That compares with 25,500 private residential units completed in 2016.
Government officials are trying to limit risks to the financial system and the economy from rocketing prices, while seeking to address a yawning affordability gap that has prevented young residents from getting on the property ladder. In rolling out cooling measures, the Hong Kong Monetary Authority has targeted groups including mortgage borrowers whose income is “mainly derived from outside Hong Kong.”
Subsidized Flats
Pledging to do more to tackle the city’s housing woes, Chief Executive Carrie Lam said Wednesday that the government will offer subsidized flats to first-home buyers who are permanent residents.
Graduates, together with mainlanders who arrive on work visas and later become citizens, may be swelling demand by 3,000 apartments per year, with that figure set to grow by a third in coming years, according to CLSA’s Wong.
Mavis Lee, a senior branch manager at Centaline Property, said she’d noticed more young clients from the mainland who had studied in Hong Kong in recent years, many flush with funds from their parents.
“These post-80s or post-90s buyers come from money and in most cases, as the only child in the family because of the one-child policy, their parents are willing to provide them with the best,” she said. “Many have the down payments paid by their families.”
Permanent Residents
Hong Kong hosted 12,037 university students from the mainland, representing 12 percent of enrollment, during the 2016-2017 school year, University Grants Committee statistics show. For those who stay after four years in university, it takes another three years to become a permanent resident, exempt from the additional 15 percent stamp duty faced by foreigners purchasing property.
When the University of Hong Kong surveyed graduates in 2015, it found that 46 percent of its students from the mainland stayed and worked in the city. Of those who stick around, many are in financial services, the industry that accounts for about a third of the long-term work visas for mainland professionals.
Hong Kong University of Science and Technology’s graduates from the mainland had a median monthly income of HK$35,000 in 2016, while the number for all graduates was just HK$16,078, according to the university’s surveys.
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