A lorry driver’s hunt for a home - and what that says about Hong Kong’s property market

HONG KONG - Throughout his entire adult life, truck driver Ronnie Lo had never contemplated buying a home. At 29, he is still living with his mother and 19-year-old brother in a public rental flat in Tuen Mun.

That changed in 2022. Now, while driving his truck ferrying cargo between Hong Kong and mainland China, Mr Lo casts a speculative eye on some of the neighbourhoods he passes through. On his breaks, he browses property listings of two-bedroom apartments on his phone.

“As long as it isn’t at a prime location, I’m quite sure that I’ll be able to afford it now,” he said.

Due to a double whammy of the city’s Covid-19 lockdown and an exodus of residents, Hong Kong’s famously unaffordable homes are hovering within reach for some of those who had remained.

By December 2022, average home prices had

plunged 15.6 per cent from a year ago,

putting a screeching halt to 13 straight years of gains.

In recent weeks, Mr Lo has accelerated his search for a home. On Feb 6,

borders with mainland China fully reopened.

“I worry now that we’ve reopened, mainland investors are going to come back in and push prices up again,” he fretted.

Analysts say there is a narrow window till the end of the year for Hong Kongers to buy property before prices recover to pre-pandemic levels.

“Since the lifting of restrictions between Hong Kong and the mainland, we’ve seen an increase in transactions for properties in the mass market,” said Mr Martin Wong, head of research and consultancy for Greater China at property services provider Knight Frank.

By the third week of February, there had been 5,000 transactions in the mass market, the same number as December and January combined.

“In 2021, there were 74,000 transactions a year, or about 6,000 a month, so we’re still not quite there yet,” said Mr Wong.

“But we firmly believe that transactions will continue to increase with the reopening and, for now, all we’re seeing is a clearing of unsold units that have been sitting in the market for a while.”

Before the pandemic, mainland buyers – including investors looking to park their money in a safe haven – made up a significant percentage of Hong Kong’s property market. This stood at 8.4 per cent in 2019, a slight dip from the 2011 peak of 11 per cent.

Over the past two decades, home prices have skyrocketed about 350 per cent in the city.

Homes in Hong Kong are an average of 23.2 times the median annual wage in 2021, the most recent year of available numbers, making the city the most unaffordable among 92 housing markets surveyed by the Urban Reform Institute and Canadian think-tank Frontier Centre for Public Policy.

It exacted a tremendous political and social cost, creating one of the world’s largest wealth gaps, anger at the government and resentment towards mainlanders.

Following widespread protests in 2019, Beijing has identified housing as an issue it wants the city’s leaders to resolve, with Chinese President Xi Jinping calling in 2022 for a “better life, a bigger flat” for the city’s residents.

A slew of measures has since been announced to make home ownership more accessible for the city’s poorest residents, such as making more government land available for flats and increasing transitional housing projects to reduce waiting time for public flats.

Since 2022, first-time home owners have been able to borrow up to 90 per cent of their property’s value. New measures announced on Feb 22 also mean that first-time buyers would pay up to HK$44,000 (S$7,550) less in stamp duty.

But what had moved the needle thus far was the pandemic, which meant that investors from the mainland were shut out of Hong Kong’s housing market. This was exacerbated by an exodus of expatriates and migrating Hong Kongers, further depressing home prices.

This meant that some, like publishing executive Serena Ho, can finally buy a unit.

She was among 90 per cent of over 45,000 property buyers in 2022 who were first-time home owners.

The 38-year-old recently bought an 867 sq ft two-bedroom flat in Sai Wan Ho, an estate east of Hong Kong Island right by the MTR station.

“Before this, I thought I’d have to keep living with my parents because it didn’t make sense to spend millions just for a tiny studio apartment,” she said.