Chinese home buyers in Hong Kong make up only 5.6% of overall sales volumes in 4Q14

Despite recent monetary easing.

Mainland Chinese buyers have long been regarded as an important source of marginal demand, and this has been the case not only for Hong Kong retail sales but for the local housing market as well.

According to a research note from Barclays, further, usually, with China easing and the strong momentum in the Hong Kong housing market, one should expect Chinese buyers to jump back on the bandwagon.

However, a review of purchases shows that the percentage of mainland buyers dropped in 4Q 2014.

According to data from Centaline, in 4Q 2014, Chinese buyers represented only 5.6% of overall volumes (down from 8.2% in 4Q 2013). In the luxury market, Chinese buyers declined from 18.3% in 4Q13 to 13.6% in 4Q14.

Here's more from Barclays:

Are the Chinese buying more homes? Centaline Research tracks the proportion of Chinese buyers in the Hong Kong housing market on a quarterly basis.

This is done by checking whether individual homebuyers’ names are spelt phonetically. Although we have previously revisited this theme in What is the new normal? The Importance of China (24 October 2014), given the recent monetary easing in China and recent momentum in Hong Kong home prices, could Chinese buyers once again become a source of marginal demand?

According to data from Centaline, the answer is “No”. In 4Q14, Chinese buyers only made up 5.6% of overall sales volumes, down from 8.2% in 4Q13.

Their participation in the primary market declined from 13.7% in 4Q13 to 10.8% in 4Q14 and in the secondary market, they fell from 5.3% to 4.1%.

Using HK$12mn as a cut-off point between mass and luxury, Chinese participation also declined from 7.0% to 4.7% in the mass market and declined from 18.3% to 13.6% in the luxury market.