Hong-Kong Changes Property Rules for Investment Scheme

In a move to broaden the appeal of its investment migration program, Hong Kong has adjusted the property investment thresholds for its New Capital Investment Entrant Scheme (New CIES). Effective immediately, the qualifying transaction price for residential properties has been significantly reduced.

Chief Executive John Lee Ka-chiu announced on Wednesday that the minimum price for a residential purchase to be considered under the scheme is now HK$30 million, down from the previous HK$50 million. However, the cap on the amount of residential investment that can be counted toward the scheme’s mandatory HK$30 million asset requirement remains fixed at HK$10 million.

Conversely, the government has incentivized non-residential investments by raising its countable cap to HK$15 million, up from HK$10 million, with no minimum transaction price attached. InvestHK, the department responsible for the scheme, was quick to frame these adjustments not as a stimulus for the property market but as an expansion of investment choices for applicants.

The relaunched CIES, which began accepting applications in March 2024, mandates a HK$30 million investment in Hong Kong assets. This must be allocated with HK$27 million in approved financial investments and HK$3 million into a designated portfolio. The government revealed the program has already garnered 1,900 applications, representing approximately HK$58 billion in potential investment, projecting an annualized intake of 2,400 to 2,800 applications.

The adjustment to the scheme's rules is widely seen by analysts as a measure to increase the program's attractiveness by offering more flexibility. Financial services firms and immigration consultants have noted that the previous HK$50 million threshold for a residential purchase was restrictive.

The change is expected to broaden the range of eligible properties, potentially making the program appealing to a wider pool of applicants. However, property market analysts caution that the direct impact on the overall real estate market may be limited.

This perspective is supported by market data. According to a recent report from S&P Global Ratings, while property transactions have picked up from their lows, the market is still in a corrective phase and is not expected to see a rapid, broad-based recovery. The high-end sector, which this policy targets, represents a small fraction of overall transactions. Therefore, while the policy may stimulate activity in a specific luxury segment, it is unlikely to single-handedly reverse broader market trends, which are more influenced by interest rates, economic sentiment, and housing supply.

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