HONG KONG residents spent 9.4 billion yuan (US$116 million) buying 18,000 apartments on the mainland in the first nine months of this year, an 8 percent year-on-year increase in the amount spent, the China Daily reported.

The Land Power Group, a Hong Kong-based real estate agent specializing in the mainland property market, predicted Hong Kong residents would buy 24,300-26,100 mainland units for a total cost of 13.6 billion yuan by the end of the year.

Shenzhen, which neighbors Hong Kong, remained the prime target for Hong Kong property investors, accounting for 52 percent of the total number of apartment purchases recorded from January to September, up 4 percentage points from the same period last year.

A total of 9,200 flats in the city were sold to Hong Kong residents, the Daily said, adding that 73 percent of respondents agreed the geographical proximity of Shenzhen to Hong Kong was the primary reason for choosing Shenzhen over other mainland cities.

About 70 percent of Hong Kong residents owning a Shenzhen property expressed interest in buying another unit.

Guangzhou came second, with 16 percent, or 2,900 flats.

Property purchases in Shanghai, however, saw the largest drop of 3 percentage points amongst regions surveyed, highlighting concerns of that the region's property bubble may have burst.

Land Power Chairman Michael Choi noted that the mainland's property market was regaining its growth momentum with the Central Government easing its macroeconomic control.

The Shenzhen property market has marked an 8 percent rise so far this year, and the survey also pointed out that the growth rate of the Guangzhou property market is set to outperform that of Shanghai and Beijing owing to the comparatively low price there.

The property-buying spree was partly due to the increasing economic integration between Hong Kong and the Chinese mainland and the appealing prospect of investment returns on the mainland's property market.

"Hong Kong investors are hedging their bets on capital gain from the further appreciation of the RMB by investing in mainland's property market," Choi noted. "For the whole of 2005, the middle and high end property market in Shenzhen will see a 14 percent gain, followed by 8 to 9 percent in Guangzhou and 3 percent in Shanghai."

"Looking ahead, the implementation of phase three of the Closer Economic Partnership Arrangement together with the establishment of a series of Hong Kong and Shenzhen boarder-crossing projects will attract more Hong Kong professionals to settle on the Chinese mainland," Choi said.

Editor: Yan