Chinese companies have been gorging themselves on land in Hong Kong, outbidding the local developers that have long dominated the market and raising fears that apartment prices in the world's least affordable city will become even more stretched.
As it stands, it takes around 35 years for a median-income household to buy a 90 sq m (970 sq ft) apartment in Hong Kong. So, by 2052 in other words. But aspiring home buyers need not panic just yet. While prices will inevitably rise a little further, what's driving these mainland Chinese firms isn't just pursuit of gains. They are buying land in the former British colony to diversify away from a home market where profits are shrinking amid government cooling measures, and to hedge against a depreciating yuan. On that front, Hong Kong, with a currency that's pegged to the dollar and a stable legal framework, makes perfect sense. The city also offers the allure of being a stepping stone to investments in the US and the UK.
In the past couple of years, Chinese companies have become active bidders in Hong Kong government land tenders, growing ever larger as they shunt aside local titans including billionaire Li Ka-shing's Cheung Kong Property Holdings Ltd.
The new arrivals aren't all property firms. They include aviation conglomerate HNA Group Co., better known for an overseas acquisition binge that's included stakes in Hilton Worldwide Holdings Inc. and other hotel brands. The real estate unit of state-owned China Minmetals Corp., the country's biggest metals trader, has also made a foray into Hong Kong. They're paying over the odds for the privilege.
Logan Property Holdings Co. and KWG Property Holding beat 13 bidders last month to pay a record $2.2bn for a mass- residential site in Ap Lei Chau island, where a new subway connection opened in December. HNA has bought three sites in the Kai Tak area, site of Hong Kong's former airport, forking out 88pc more than the highest forecasts for the first parcel in November, according to Jones Lang LaSalle Inc.
The Chinese companies are inflating values in a market where home prices have already become frequent front-page fodder for newspapers.
Despite government curbs imposed in November that doubled the sales tax to as much as 30pc for foreign purchasers and 15pc for all others except first-time buyers, apartment hunters have been unfazed.
Real estate prices are at record highs, rebounding 16pc since bottoming at the end of March last year. With interest rates remaining low, there's still plenty of demand - especially for new apartments, for which developers are offering concessions such as free furniture and easier payment terms.
Buyers from China accounted for almost half the value of all land sold by the Hong Kong government in 2016, up from 30pc in 2015 and less than 5pc in 2011, research from CIMB Group Holdings Bhd show.
That 'Chinasation' of the market, as CIMB calls it, may increase prices 10pc by 2019.
Some impact is already being felt. China Overseas Land & Investment Ltd sold all 188 apartments at a project on the site of the city's former airport on day one last week. The units were offered to Hong Kong residents only.
And while the city's Chief Executive Leung Chun-ying may bemoan the large amount of parks and green spaces that could be put to better use, mainland buyers did help the government chalk up record revenue from land sales in the first nine months of the 2016 fiscal year.
But even as Chinese developers push land values in Hong Kong ever higher, it's hard to see how they will be able to raise finished apartment prices to the levels that would enable a reasonable profit.
To illustrate how little room they have to manouvere, take a look at HNA. It paid HK$13,600 ($1,752) per sq ft for its latest site in Kai Tak, where adjacent apartments are now going for HK$20,000, according to JLL regional director of valuation, Dorothy Chow. Tack on construction costs of around HK$5,000 per sq ft (the average in Hong Kong), plus payments for architects and interest costs, and HNA would be lucky to have much left if it sells apartments at current prices.
To achieve a profit margin of at least 20pc, the average expected by Hong Kong developers, the Kai Tak site would have to command a price of HK$25,000 per sq ft.
That's a 20pc increase from current levels - no small ask for a property market where prices have almost doubled in the last five years. Few of the recent mainland Chinese land buyers have built apartments in Hong Kong before, much less sold them (China Overseas Land & Investment Ltd is one of the few that has been operating in the city for years).
Given that their aim is to use Hong Kong as a stepping stone out of the mainland and to conserve capital, they probably won't be as anxious to maximise profits as the local developers, which have been frequent targets of public dissatisfaction as home prices have soared.
That should be at least some comfort to Hong Kong's hard-pressed property seekers.
Sometimes the devil you don't know may actually be better than the one you do.