Chinese property developers have turned their sights to Hong Kong's border districts as mainlanders from neighbouring boomtown Shenzhen consider parts of the former British colony as a more affordable long-term housing prospect.
The development plans are seen by some as a turning point, with buyers from what was once considered Hong Kong's cheaper industrial hinterland increasingly viewing of the global finance hub as Shenzhen's "backyard".
While Hong Kong's property market remains red-hot, the city's international economic prestige has come under pressure after prolonged pro-democracy protests in 2019 and sweeping new national security laws last year.
Shenzhen's stature, in contrast, keeps growing. During a visit last October, President Xi Jinping touted it as "a model city", flagging plans to increase foreign investment.
In just a few decades, the sleepy backwater on China's southern border has morphed into a tech hub of about 13 million, people towering over the fishponds and farmland in Hong Kong's less-developed north. Hundreds of thousands move there every year.
In Shenzhen's prime districts, such as Nanshan where tech giant Tencent 0700.HK is based, some house prices have already surpassed those in northern Hong Kong, which is one hour or more away from the expensive central business district.
"Our long term view is Shenzhen will be the centre and Hong Kong the periphery," said an executive at a Chinese developer which bought land in the once less-appealing north, asking not to be named because he was not authorised to speak to media.
"People who work in Shenzhen may choose to commute from Hong Kong where home prices will be cheaper."
Hong Kong Land Department records show that of the six northern residential plots auctioned off since 2019, three were bought by Chinese developers.
In a separate private deal last year, China Evergrande Group 3333.HK bought 250,000 square feet in the border town of Yuen Long, from Hong Kong's Henderson Land 0012.HK for $600 million.
Property agents told Reuters the major Chinese developer plans around 200 units in the area and expects most buyers to be mainlanders. It bought at HK$10,000 per square foot and is looking to sell at HK$20,000, which it hopes will attract mainlanders from Shenzhen, an agent in contact with Evergrande said.
In the part of Shenzhen immediately across the border, prices are closer to HK$30,000 per square foot.
Evergrande is also selling 2,000 flats in the Tuen Mun neighbourhood - a 15-minute drive from Nanshan and close to a beach - after finishing a project on a plot bought from Henderson Land for $833 million in 2018.
Shenzhen-based Kaisa Group 1638.HK won a parcel there for $451 million last year, while major developer China Vanke 2202.HK has already built over 1,100 units.
Kaisa said the location, close to the Hong Kong-Zhuhai-Macau bridge, could benefit from closer integration between cities in the Greater Bay Area. Vanke's Hong Kong unit said it was convenient for travel to Shenzhen and Macau, but added northern Hong Kong is not its sole focus.
Evergrande declined to comment.
According to realtor Midland, mainland Chinese bought 40% more residential properties in Hong Kong in the first two months of 2021 than a year ago, boosted by optimism that the border will reopen as the Covid19 crisis eases.
The percentage of mainland buyers of new Hong Kong homes bottomed in the second quarter last year at 8.7% of transaction volumes, and rose to 11% in the first quarter this year.
More than 80% of their 2021 purchases were valued above HK$50 million ($6.4 million), Midland said.
"Chinese developers are upbeat about the Hong Kong property market," said Midland HK residential CEO Sammy Po. "Northern districts are one of the areas Chinese investors are buying in."
Tuen Mun and Yuen Long saw many anti-government and anti-China demonstrations in 2019. The protests are unlikely to resume, but tensions remain as some long-time residents feel the wealthy newcomers are disrupting their lifestyle.
"Tuen Mun has higher consumer goods prices than the city centre, that's abnormal," said 50-year-old Wong, who only gave her last name due to the sensitivity.