The demand among Hong Kong buyers for homes in Beijing is on the rise, but buying is proceeding slowing because of the distance between the two cities, property consultants said. Compared with Shenzhen and Shanghai, Beijing is not a preferred option at present, they said.
That the relative remoteness of the capital was an influencing factor was reflected in slow Hong Kong sales for a popular residential project, Jianwai SOHO, in downtown Beijing.
Las Saturday, Beijing-based developer SOHO China offered Hong Kong buyers 20 flats in the fourth phase of the development, but only 12 flats had been sold as of Monday.
Jianwai SOHO, in which SOHO China has a 90 percent stake, is a popular project in Beijing. The project topped the market in the capital last year with sales of three billion yuan. It comprises a seven- phase, 7.53 million square foot-residential developments, and a two-tower office development, in downtown Beijing. About 80 percent of the seven-phase residential flats were sold in the city.
David Hui, sales managers at Centaline Property Consultants, the sole marketing agent for Jianwai SOHO, said the sales response was In line with the company s expectations.
We did not expect all 20 flats to sell immediately, because Beijing is a new market to Hong Kong buyers, Mr Hui said.
A total of 400 people turned up on the first day of sales. Unlike flats in some southern cities that cost less than one million yuan, the Jianwai SOHO flats, priced from HK$1.5 million to more than $2.5 million, were not prompting potential buyers to make quick purchases, Mr Hui said.
The selling price of $1500 per square foot in the fourth phase is 20 per cent higher than the price of flats in phases one, two and three.
Michael Choi Ngai-min, chairman of Land Power International, attributed the slow sales to the project s location.
He said buyers in Hong Kong showed keener interest in Shanghai and Shenzhen: Shanghai promised strong economic growth, while Shenzhen offered the attraction of close proximity to Hong Kong.
Mr. Choi said Beijing was seen by Hong Kong buyers as more the nation s capital than as a finance center, and they believed the city s price growth potential was not as strong as it was in Shanghai and Shenzhen.
According to Deutsche Bank, residential prices in Beijing fell about 10 percent as a whole because of the launch of cheap government housing. But there was a 5 percent to 8 percent growth in the middle to high-end market last year, the investment bank said.
