Lowered property investment qualification for visa grants aimed at stimulating Hong Kong's struggling property market
Hong Kong Lowers Minimum Investment Threshold for Luxury Home Buyers
In an effort to boost demand for luxury homes in Hong Kong's struggling property market, the government has lowered the minimum investment threshold for its investor visa program. The revised threshold, announced by CEO John Lee on Wednesday, reduces the minimum investment required to HK$30 million ($3.9 million) for the Capital Investment Entrant Scheme.
Launched in March last year, the scheme is open to foreign nationals, as well as residents of Taiwan, Macau, and the People's Republic of China who have obtained foreign permanent residency. Successful applicants are granted a two-year visa for investing HK$30 million in permitted assets in Hong Kong.
Out of the minimum HK$30 million, HK$27 million must be invested in financial assets such as stocks, bonds, or property. The remaining HK$3 million must be placed into a designated investment portfolio. With the revised threshold, investors no longer need to demonstrate ownership for two years but only for six months.
As of April, the scheme had received 1,257 applications, with 512 approvals expected to bring more than HK$37 billion in investment to the city. By July, authorities had issued 673 visas, with qualified entrants contributing HK$21 billion.
However, analysts caution that the impact of this change may be limited due to ongoing issues such as housing oversupply, weak economic growth, and subdued sentiment. The long-term impact of the revised threshold on the broader property market remains uncertain.
Previous measures like tax cuts and looser mortgage rules aimed at stimulating demand have had little effect, with residential prices in Hong Kong remaining close to their lowest levels since 2016. The cap for residential property investment to be counted toward the scheme remains unchanged at HK$10 million.
The relaunched program aims to enhance Hong Kong's attractiveness as an investment hub while providing a modest lift to its luxury housing sector. The scheme's lowered minimum threshold for home purchases is a step towards revitalising the city's property market, although the full effects remain to be seen.
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