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Property News Weekly Digest
2016/12/31
〈Asian Post, Dec 31, 2016〉Hong Kong home prices rose to a record in November after eight consecutive months of gains, even as the government unveiled higher stamp duty to curb investment demand.

But market watchers expect home prices to have eased back this month as the data reflects the full impact of the revised stamp duty and the impact of a quarter-point rise in US interest rates.

The monthly price index for private homes stood at 306.6 last month, 0.16 per cent higher than the previous record high in September last year, according to data released by the Rating and Valuation Department yesterday.

November prices were up 0.78 per cent on the month, slower than the 2.7 per cent month-on-month gain in October. "We have seen quite a number of apartments changing hands at record prices as most owners are reluctant to sell unless they receive attract offers," Ricacorp Properties research head Derek Chan said. High-priced transactions were seen in mass and super deluxe residential developments.

Home prices in major housing estates soared to new highs. Flats at South Horizons in Aberdeen reached HK$16,497 per square foot, 12.8 per cent up from the previous peak in September last year, Centaline Property Agency said.

However, prices at Taikoo Shing did not surpass the previous peak. Average transaction prices were HK$16,783 per square foot, 3.1 per cent below the previous peak.

In the Western part of the New Territories, prices at Kingswood Villa in Tin Shui Wai, the largest housing estate in the district, climbed to HK$8,344 per square foot, 7 per cent higher than the previous peak in September last year.

In Kowloon, prices at the Linerte development in Cheung Sha Wan were HK$14,779 per square foot, 6.7 per cent above the previous peak level.

〈China Daily, Dec 31, 2016〉Domestic property giants stranded on sidelines as northern rivals, fleeing regulations, tight margins and a shrinking yuan, swoop in and grab sites

Hong Kong's government revenue from land sales rose to a record HK$71.88 billion in the first nine months of the 2016 fiscal year ending March 31, as HNA Group led mainland Chinese developers in their buying spree in the city.

With the final HK$5.87 billion from a sale at the former Kai Tak airport, land revenue made up 30 per cent of government income in the first three quarters, surpassing the previous full-year record of HK$66.9 billion in 2011 and beating a government forecast.

Mainland developers, fleeing market-cooling restrictions at home and driven by a desire to take their deteriorating currency out of the country, have outspent Hong Kong developers in three of the 23 land auctions this year, each time setting new records far exceeding market valuation.

"The frenetic buying spree by mainland developers gave us one surprise after another," said Vincent Cheung Kiu-cho, executive director of valuation and advisory services for Asia at Colliers International. "Their ultra aggressiveness in Hong Kong far exceeded our expectations."

Kai Tak, site of Hong Kong's former airport, is earmarked for residential development, potentially providing housing for as many as 90,000 residents with 83,000 jobs. Planned as Hong Kong's second business district, the area will have 62.42 million square feet of office space by 2020, double the space in Central.

The dominance by developers from north of the border is bad news for the city's home-grown companies, making it harder for them to replenish their land bank to drive their future projects.

〈China Daily, Dec 30, 2016〉Hong Kong may be seeing a ray of hope in its beleaguered property sector, with more than 3,600 private residential apartments due to come on stream in the fourth quarter of the 2016-17 fiscal year (January to March 2017).This would exceed the government’s target for the entire fiscal year by more than 8 percent, according to Secretary for Development Paul Chan Mo-po.

Taking into account the government’s land sales program, MTR Corporation’s railway property development, redevelopment projects undertaken by the Urban Renewal Authority (URA), as well as private developers’ lease modifications and redevelopment projects, some 3,610 new apartments will flood the local property market.

MTR Corporation’s residential projects on Kam Sheung Road, Yuen Long and in Wong Chuk Hang on southern Hong Kong Island could contribute 2,450 apartments, while URA projects in Central could provide another 115 units.“The government had already supplied 15,000 units in the first three quarters of the current fiscal year. Together with the fourth quarter’s figure, the government is confident that the whole-year residential supply target of 18,000 units can be exceeded by 8 percent,” Chan said on Thursday.

He said more than 5,000 apartments could be available in the first quarter of the 2017-18 fiscal year (April to June 2017), and details will be released in February next year.

“Though the supply figure may fluctuate for some time, the administration is striving to make land supply consistent, stable and meet the target,” he said.

Real-estate advisory company Jones Lang LaSalle said it expected the supply of private residential apartments to hit 20,000 units annually between 2017 and 2019, leading to a scenario of increased supply amid depressed market demand following the government’s latest measures to cool the runaway property market.

Last month, the government imposed a flat stamp duty rate of 15 percent on property transactions involving individual buyers (except first-time Hong Kong permanent residents) and corporate buyers — up from the previous 1.5 percent to 8.5 percent rates. As non-resident and corporate homes buyers are subject to an additional 15 percent buyer’s stamp duty, the new measure means an effective tax rate of 30 percent for the two categories of purchasers.

〈Asian Post, Dec 29, 2016〉The Hong Kong government is expected to have released enough private housing land to build 19,460 new flats before the end of the fiscal year ending on March 31 - the highest level since the cityresumed land sales in 2010.

Secretary for Development Paul Chan Mo-po said with land expected to be put up for sale in the fourth quarter, the total would exceed its private housing target of 18,000 units by 8 per cent.

Two government residential sites, two railway property projects and one project under the Urban Renewal Authority would be put out to tender in the next three months, adding the equivalent of 3,610 more new units during the current fiscal year, he revealed yesterday.

The latest release of potential flat supply for January to March would still be 22 per cent lower than the previous quarter's 4,600.

"Although the supply of private housing land from government sale in the next quarter is less than previous quarters, this should not be misinterpreted as a lack of residential sites available for sale or the government reducing its land supply," Chan said. "Rather, it reflects the government's intention to maintain its steady supply target.

"Exceeding the target by too much may affect government credibility, and the certainty of meeting its annual supply target."

To ensure land supply remained stable, he added, private housing plots would be announced in February, providing capacity for more than 5,000 flats.

In the first three months of the next calendar year, the government is set to offer two residential sites at Whitehead in Ma On Shan and Kai Tak for tender, offering the potential of 1,040 flats.

Chan said 2,450 more flats would be offered by tender at two separate property projects by MTR Corp. The rail operator is planning to tender the 1,650-unit first phase of the developments at West Rail Kam Sheung Road Station, and an 800-unit development at Wong Chuk Hang Station.

〈The Standard, Dec 29, 2016〉New World Development (0017) chairman Henry Cheng Kar-shun said yesterday he has no idea how mainland companies acquire land in Hong Kong at record-high prices.

Measures launched last month to cool the property market mainly affected transactions and had a limited impact on home prices, he said.

Cheng believes demand for homes is still strong, although the recent rate increase in the United States may raise the cost of buying homes. He expects home prices to remain stable in 2017 as long as the supply and demand are balanced.

New World will remain prudent in land acquisitions, considering the economy, quality of the land and the needs of the firm.

He hopes the exchange rate of the yuan will be stable next year as depreciation would lift investment costs of the firm.

Cheng said the group has already moved resources to first-tier cities from second and third-tier cities. It also plans to bid for comprehensive large-scale projects.

Meanwhile, Sun Hung Kai Properties (0016) will launch the price list for the second phase of its Grand Yoho project in Yuen Long in the next few days.

Its deputy managing director, Victor Lui Ting, said construction of its show flats is almost completed. Distributing brochures yesterday, Lui hopes the project can start sales next Saturday.

Floor plans for Grand Yoho four- bedroom units and two suites were also unveiled yesterday, accounting for 30 to 40 percent units of the second phase. They are expected to draw second- home buyers, said assistant general manager Allen Woo Chi-yuen.

Mount Nicholson, the luxury home project of The Wharf (0004) and Nan Fung Group on The Peak, has sold its largest bungalow for HK$1.08 billion, the largest single transaction in the first- hand market since the launch of the additional cooling measures. It also set price record for bungalows. With 9,950 sellable square feet, the price per ssf hit HK$108,500.

But the developers have not disclosed whether the buyer has to pay the 30 percent stamp duty.

Another developer, Wing Tai (0369), said it cashed in HK$1.7 billion from three home projects this year, up about 13 percent, or HK$200 million, from last year.