Hong Kong’s desperate homeowners slash prices by 20 per cent
Hong Kong is tipped to become one of the top sources of foreign investment in Portuguese property as residents seek a European haven from the violent protests that have consistently reduced their city to something resembling a war zone.
An increase in demand from Hongkongers has prompted property agents from Lisbon, the Portuguese capital, to travel to the troubled city to meet clients and make a sales pitch to them.
About half of the buyers from Hong Kong are aiming to obtain permanent residency under Lisbon’s golden visa programme, according to property agents.
“I believe the current protests have created a strong interest in property markets in Europe,” said Luiz Felipe Maia, director at Maia International, a property agent based in Lisbon.
“We expect Hong Kong to rank among the top five sources of foreign capital in Portuguese real estate,” said Patricia Climaco, a partner at Castelhana.
“I don’t think they will beat the Brazilians, French, English and mainland Chinese buyers” he said.
Maia said he would be coming to Hong Kong owing to a “significant increase in the leads” coming from the city.
“I have received over 25 inquiries in the last two months and had to extend my agenda from two to six days in Hong Kong to accommodate all meetings and presentations. I will possibly extend for longer if necessary,” he said.
Hong Kong has been mired in its worst political crisis in decades, with frequent clashes between anti-government protesters and police denting confidence on the city’s prospects and stability. Many Hongkongers have been looking for a backup plan that will allow them to move overseas in a hurry.
Portugal, with its fast-track scheme to get residency with a property purchase of €350,000 (US$384,000), is definitely on their radar.
Maia’s first sale to a Hong Kong-based buyer was in early 2018. Since then he has had 11 deals with Hongkongers who bought property worth between €380,000 and €3.1 million. Houses above €1 million were usually bought by people intending to have a holiday home in Portugal, he said.
“I expect to achieve five to 10 sales in Hong Kong this time with an average price of €600,000 per unit,” Maia said.
As of the end of August, Lisbon’s golden visa programme had granted about 8,000 residence permits, with a little over half of them to Chinese nationals, followed by Brazilians.
The Portuguese economy has grown 2.1 per cent in 2019, and the unemployment rate has dropped 2 percentage points to a 14-year low of 7 per cent, according to a report by property consultancy CBRE.
Its tax-friendly regime is also providing support to its property market and wider economy.
“In the last two years, Portugal attracted over 20,000 wealthy people from France as we don’t have inheritance and wealth tax,” Climaco said.