Mainland Chinese companies have piled into Hong Kong property in 2015-2016, outbidding some of the territory’s most powerful developers to gobble up 29 percent of land sold for development in one of the world’s most expensive real estate markets, according to new industry figures. 
That is almost a six-fold increase from their purchases of just 5 percent of the land sold in public land auctions in the years 2013 and 2014, the data from real estate broker Midland Realty shows.
The buying frenzy comes at a time when home prices in Hong Kong have reached new record highs, bucking government cooling measures and potentially fueling discontent in a city whose population is already under strain from high living costs and a widening wealth gap.
Nearly 200,000 Hong Kong residents, half of them under the age of 35, have resorted to living in wire cages, half of a bunk bed or partitioned apartments often smaller than car park spaces.
The purchases by the likes of HNA Group and China Overseas Land & Investment drove mainland institutional investment in real estate to $6.6 billion last year, according to DTZ/Cushman & Wakefield, compared with just $1.46 billion in 2015.
The land grab is set to drive sky-high apartment prices up even further, realtors said.
Denis Ma, head of research at real estate services firm JLL in Hong Kong, said luxury apartments to be built on HNA Group’s latest plot of land, purchased for $713 million at the former airport site of Kai Tak, could fetch HK$25,000 ($3,200) per square foot, almost 40 percent higher than residential units sold recently in the area.
Hong Kong’s average price per square foot for luxury property, at $3,000 is ranked second most expensive in the world, trailing just after Monaco, according to Christie’s International Real Estate. By comparison, London is the third most expensive at $1,930 while New York is at $1,860.
“There is a high chance they (mainland companies) will reset the benchmark in areas like Kai Tak,” Ma said of the district overlooking the city’s iconic Victoria Harbor.
Hong Kong will auction a site valued at as much as $2.2 billion in the first quarter, the first sale of commercial land in the Central business district in more than 20 years and it is widely expected to be snapped up by a mainland Chinese developer, market participants told Reuters.

Source: Arab News