Financial Secretary Paul Chan Mo-po said the government has been discussing with the central government about a property connect mechanism, a concept similar to the Stock Connect that allows capital to flow in and out of the mainland through the same channel.
He also said that the economy will continue to improve in the second half.
At a media briefing on an official report about Hong Kong's business environment yesterday, Chan said authorities are trying to “explore appropriate relaxations”on capital transfer restrictions for mainland workers settling in Hong Kong who want to purchase local property.
The push aims to streamline fund flows while preventing capital outflows, he said.
The proposal was lifted by Starry Lee Wai-king, Hong Kong's delegate to the National People's Congress Standing Committee.
Lee welcomed Chan's remarks, framing the mechanism as part of the city's role as an offshore yuan hub. Her plan would impose strict repatriation rules, requiring funds to return to the mainland if buyers leave Hong Kong.
Hannah Jeong, head of valuation and advisory services at CBRE Hong Kong, expects the proposed mechanism to drive mainland buyer interest, particularly in the high-end segment.
Mainland buyers typically target mid-to-high-end properties, with initial benefits likely seen in prime districts like Mid-Levels, she said.
She anticipates renewed momentum for ultra-luxury homes above HK$100 million, with rebounds in both transaction volume and pricing.
Kenny Ng Lai-yin, a securities strategist at Everbright Securities International, said the mechanism is likely to lift shares of local developers and boost the Hong Kong market by improving liquidity through capital inflows.
However, he cautioned that the impact may take time to materialize, with no significant short-term gains expected.
Chan also revealed that Hong Kong will post its 10th consecutive quarter of economic expansion when preliminary second-quarter gross domestic product figures are released today.
He expects stable growth through the second half of 2025.
The city’s economy grew 3.1 percent year-on-year in the first quarter after a 2.5 percent full-year expansion last year.
Meanwhile, Hong Kong's new advantages are emerging, including innovation and technology, international law and art trading, according to the 2025 Report on Hong Kong's Business Environment.
The report, the first update since 2021, highlighted the city holds robust core competitiveness and emerging new growth momentum.
The government also said retail sales are expected to remain steady in June amid improving consumption sentiment.
Invest Hong Kong's director-general of investment promotion Alpha Lau Hai-suen said the report underscores Hong Kong's strengths, adding the agency will continue to focus on attracting strategic industries.
Secretary for Culture, Sports, and Tourism Rosanna Law Shuk-pui said Hong Kong's expanding sports, cultural and tourism infrastructure will fuel the city's "mega event economy," driving economic recovery and growth.
Secretary for Transport and Logistics Mable Chan pledged to leverage Hong Kong's role as an international shipping and aviation hub to strengthen its strategic position.
Secretary for Justice Paul Lam Ting-kwok said the rule of law is Hong Kong's best business environment. He said that the city's strong reputation in international, high-standard legal services and dispute resolution underpins Hong Kong's institutional advantage and supports its status as a global financial, trade and shipping hub.
Secretary for Education Christine Choi Yuk-lin said Hong Kong will host next year's Asia-Pacific Association for International Education 2026 conference and exhibition and vigorously promote the event to showcase Hong Kong's commitment to global educational collaboration and enhance its international influence in academia.
The Hong Kong Trade Development Council welcomed the report, saying that it will further attract global businesses to leverage the city's business platform and professional services.
“As an international investment and financial center, Hong Kong can provide diverse financing channels and options for infrastructure projects in the mainland and other regions, contributing to the high-quality development of the Belt and Road initiative," TDC chairman Frederick Ma Si-hang said.
CICI CAO
cici.cao@singtaonewscorp.com
