Impacts of Hk-macao Taiwan Mainland Residence Permits on the Property Market
In recent years, the pace of increasing control in the Chinese property market is characterised to be swift imposition but gradual removal. Tracking the deepening of economic reforms, the number of people from Hong Kong, Macao and Taiwan working, studying and living in China have been increasing every day—with plans to stay there for a long time. In view of this, the Chinese government has announced the implementation of new measures in September, allowing Hong Kong-macaotaiwan residents to apply for residence permits, which enables them to enjoy the same public services and facilities as mainland residents do. However, does it mean that they can then possess home purchase rights simultaneously?
First-tier cities in mainland China are implementing different home purchasing policies for non-residents, the most relaxed of which is Beijing’s; holders of working and residence permits can buy a maximum of two residential units there. In Shanghai, a married couple with five years’ contributions in their respective social security are allowed to buy one unit. As for Guangzhou, after successfully applying for residence permits, potential home buyers also need to present records of three consecutive years in social security payments during their five-year stay, before being allowed to buy one unit each. In Shenzhen, each residence permit holder must present five consecutive years of social security or tax payment certificates before becoming eligible to buy one unit.
In other words, after the new regulation, most Hong Kong, Macao and Taiwan citizens wanting to buy properties in the popular Chinese cities may need to go to Beijing. Affected by property market measures and rising mortgage rates, average home prices in Beijing during the second quarter of 2018 stood at RMB 38,983 per square metre, gaining 8.2% year-on-year or declining 7.7% quarter-on-quarter. A total of some one million square metre was transacted over the same period, dropping 23% year-onyear or rebounding 98% quarter-on-quarter. In fact, the current primary home market is dominated by transactions of high-end residential properties such as villas, while recovery in the secondary market is driven by first-time home buyers and upgraders. Given the rising interest rate environment in the second half of 2018, uncertainties remain, but the issuance of residence permits is expected to improve sentiment in the city’s housing market.