Timely rule change to help flat buying in Hong Kong’s Greater Bay Area
- Relaxing daily cross-border remittance caps will make it easier to purchase homes in the development zone, and thus provide incentive for jobseekers and entrepreneurs to move
Hongkongers are often reminded of the opportunities to be found in the transformation of the Greater Bay Area into an economic powerhouse. Key to that vision, embracing nine southern China cities, Hong Kong and Macau, are innovation and integration.
Ultimately they both depend on the mobility of entrepreneurship, talent and capital.
Often that will come down to something as basic as relocation and buying a flat. Hence the significance of new rules from the end of the month exempting Hong Kong and Macau homebuyers from a daily cross-border remittance cap of 80,000 yuan (HK$87,000) when purchasing property in the bay area.
They will be able to transfer the entire amount needed to settle a deal, removing a difficulty that does nothing to promote integration. This is another move to iron out the kinks in the fusing of financial and economic systems to make capital flows easier.
The bypass of the daily limit will not only enable more Hongkongers to own property in Guangdong, but also will make it easier for jobseekers and entrepreneurs to buy homes across the border if they want to venture there to seize job opportunities or set up business.
That, surprisingly, is a practical consideration previously overlooked. Policymakers talk a lot about encouraging Hongkongers to move northwards to set up businesses or find jobs. Yet the capital cap remains, making it seem impractical and inconvenient to think about buying homes. The alternative of renting is a disincentive if the authorities want to encourage someone to think 20-30 years into the future.
Hong Kong and mainland banks have begun to prepare for the new cross-border payment regime. “The key issue is to make sure it can be conducted smoothly when it becomes effective from February 26,” Eddie Yue Wai-man, chief executive of the Hong Kong Monetary Authority, told the Legislative Council’s financial affairs panel.
This is a timely and welcome move. It also comes at an opportune moment for Hongkongers. With an ailing mainland property market and a slump in the yuan, Guangdong homes are even cheaper in Hong Kong dollar terms.
