(Corrects surname in 13th paragraph)
* Mainland Chinese buyers of HK property at four-year low
* Britain, U.S. and Canada among favoured destinations
* HK overseas property transactions jump nearly 50 percent
By Yimou Lee and Twinnie Siu
HONG KONG, June 25 On the seventh floor of a
luxury hotel in the heart of Hong Kong, a Chinese couple listens
carefully as an agent takes them on a virtual tour of an
upmarket property development for sale - not in the former
British colony, but in London.
Cash-rich mainland Chinese, who some in Hong Kong blame for
pushing property prices to record highs, have fled the city's
real estate market, scared off by cooling measures that have
sent them scouring overseas for better options.
For many, the search starts in the ballrooms of Hong Kong's
luxury hotels which host overseas property fairs nearly every
weekend, offering prospective buyers a glimpse of homes abroad
while providing refreshments such as sparkling water and the
bite-sized Cantonese snack dim sum.
"We can only see pictures of the project now so that's why
we have to go to London to take a look at the environment of the
building," said Christina Chen, who flew with her husband from
Shanghai to Hong Kong to check out plans of a development at
London's Olympic Park before flying there herself to see it.
"The return on investment is much higher in London than in
China and Hong Kong," she said in a room at the Landmark
Mandarin Oriental, a popular choice for property exhibitors.
Mainland Chinese accounted for 18 percent of new luxury home
sales in Hong Kong in the first quarter - the lowest level in
four years - down from 43 percent in the third quarter of last
year, before cooling measures were announced, according to real
estate company Centaline Property Agency.
Hong Kong, where property prices are among the most
expensive in the world, has imposed a series of tightening steps
since October, including a 15 percent tax on foreigners that
many industry watchers believe was targeted at mainland buyers.
"Mainland Chinese have lost the ticket to buy properties in
Hong Kong, now that tightening measures are in force," said
David Hui, overseas sales director at Centaline. "If they want
to invest in property, they now need to go overseas."
HONG KONG OVERSEAS PROPERTY SALES JUMP
The flight abroad has taken them increasingly to Britain and
the United States, where Chinese rank alongside Canadians as the
fastest-growing group of buyers, data from the U.S. National
Association of Realtors shows.
In London, overseas buyers accounted for 2.2 billion pounds
($3.4 billion) worth of new-build property in 2012, up from 1.8
billion pounds in 2011, according to estate agent Knight Frank.
Buyers from greater China are among the top three.
The search for homes has accelerated, with Hong Kong's
overseas property transactions jumping nearly 50 percent in May
from a year earlier - of which mainland Chinese made up a fifth
of sales, according to two property agents in the city.
More than 40 offshore projects are on offer in Hong Kong
this month, most with price tags below HK$7 million ($900,000),
with lawyers and bank representatives on hand for quick sales.
Cherrin Loo, director of international residential sales at
property consultant Savills, said she expected the number of
overseas projects on show in Hong Kong this year to jump 30 to
50 percent from a year earlier.
Another popular choice is Vancouver, where about 25 percent
of the city's more than 600,000 residents speak Chinese as a
first language. Sun Hung Kai Properties Ltd, Hong
Kong's largest developer, sold almost 90 percent of units on
offer in Hong Kong for its River Green project in the Canadian
city within a month when it debuted last month.
About half of those sales went to Chinese buyers, according
to Centaline Property Agency.
With a significant drop in mainland Chinese buyers, Hong
Kong developers have shifted their focus back to local
end-users, with some cutting prices to lure buyers.
In May, the number of Hong Kong property transactions stood
at its second lowest in 16 months, up 20.5 percent, according to
Centaline Property Agency.
Analysts expect the city's developers, including Cheung Kong
(Holdings) Ltd, controlled by the city's richest man
Li Ka-shing, to cut the premium - the difference between new
launches and second-hand homes - of new projects by 15 to 20
percent in 2013 to attract local buyers.
"The local market is our new focus," said Billy Chan, an
agent at Hong Kong Property Services. He has sold just one
residential unit this year - to a local buyer - compared with 10
in 2012, half of which went to mainland Chinese buyers. "We
don't have much opportunity from Chinese buyers now," Chan said.
($1 = 7.7592 Hong Kong dollars)
($1 = 0.6498 British pounds)
(Writing by Anne Marie Roantree; Editing by Alex Richardson)