〈Asian Post, March 25, 2017〉Real estate agents in the city are creating a false sense of demand toattract fence-sitters and push up sales of upcoming residential projects

Last weekend, three apartment projects opened for sale across Hong Kong, with a total of 1,000 units on offer. The sale, the first since Hong Kong Monetary Authority raised the key lending rate, garnered huge interest, with up to 23 buyers on average expressing interest for every unit available.

As a result of the enthusiastic interest received, Sun Hung Kai Properties' Cullinan West apartments at the Nam Cheong station and Wheelock Properties' Monterey project at Tseung Kwan O sold out.

It was enough to prompt Financial Secretary Paul Chan Mo-po to write a blog post to remind buyers that changing market conditions could "open up all kinds of risks."

Are Hong Kong's property buyers truly unperturbed by rising interest rates, of which there may be nine through the end of 2019? Not quite. The number of registrations of interest creates the illusion of demand, and by so doing draw fence-sitting property buyers into the circle.

Here's how it works. Sun Hung Kai requires customers to deposit HK$200,000 to reserve the right to buy a Cullinan West unit. Wheelock requires HK$100,000 for Monterey, as does Cheung Kong Property for its Seanorama apartments at Ma On Shan. The reservations go into a ballot, where the selected buyer gets the chance to pick their preferred units, and conclude their purchases.

Developers usually appoint agents not only to market and sell new projects, but also to conduct the registration process for prospective buyers, as well as arrange refunds for customers who fail to be selected in the ballots.

On the weekend of March 15 and 16, South China Morning Post journalists put down a total of HK$300,000 with Midland Realty to go into the ballot for Cullinan West, and with Hong Kong Property Services for consideration at Monterey.

〈China Daily, March 24, 2017〉Buyers are prepared to pay a premium for properties in prime locations in the capital while a shortage of new supply sends land prices soaring

New restrictions on home purchases in Beijing are unlikely to rectify market distortions and ease sky-high prices, analysts say.

Homebuyers are prepared to pay a premium for proximity to government services and elite schools while other factors, especially a shortage of new land supply, have been cited by analysts as a factor for the surge in prices.

Recent efforts by officials to rein in prices, including tightened down-payment requirements for first-time and second-home buyers, proved fleeting.

Last month, 11,000 homes were sold in Beijing's secondary market, up 75 per cent from January, according to real estate agency Lianjia. Prices grew 4.6 per cent to 63,579 yuan (HK$71,704) per square metre.

Homes in favourable school districts led the gains, with some homes reportedly fetching more than 200,000 yuan per square metre, equivalent to 28 times the average monthly salary in the city.

"Wealthy mainlanders want to come to Beijing, which will support the property market. The situation is just like Hong Kong," said Zhang Dawei, chief analyst with Centaline Property.

〈Asian Post, March 23, 2017〉Residential property prices in Hong Kong, already the world's costliest urban centre to live in, will remain buoyant over the next two years because the supply of land and new homes cannot keep up with demand, said Li Ka-shing, the city's wealthiest man and chairman of one of its biggest developers.

Record property prices propelled the underlying profit of Li's Cheung Kong Property Holdings up by 16 per cent to HK$18.03 billion last year, spurring the firm to raise its year-end final dividend by 9.5 per cent to HK$1.15 per share.

"Home prices will not fall over the next two years as there is strong buying demand," Li said after announcing the 2016 results of his two holding companies yesterday.

CK Property and CK Hutchison Holdings both reported stronger profits for last year, delivering to shareholders a solid set of full-year results after Li reorganised his corporate empire.

Revenue at CK Property jumped 19 per cent to HK$69.9 billion, beating analysts' estimates in a Bloomberg survey. "The result is better than expected," Prudential Brokerage's associate director Alvin Cheung Chi-wai said. "Homebuying interest will not be affected in the near future by the imminent interest rate increases."

Like other developers and land owners in the city, CK Property has been outbid in land auctions in the past year by mainland companies flushed with capital.

"The market is concerned about CK Property's land bank in Hong Kong in the face of strong competition from mainland developers," Cheung said.

At Hutchison - owner of all the non-property businesses of Li's worldwide holdings, spanning telecommunications, container ports, power plants, supermarkets and retail outlets - profit rose 6 per cent to HK$33 billion. The company raised its final dividend by 5 per cent to HK$1.945 per share.

Li said there was a global recovery in retail spending even though Hong Kong's malls and shops remained in the doldrums. "Globally, the retail market picked up last year and our business performed well, but Hong Kong was the worst performer," he said.
Research showed graduates from a Beijing secondary school were 41 times more likely than a comparable student from the rural province of Anhui to be admitted to Peking University. When compared to counterparts in neighbouring Henan province, Beijing students were 28 times more likely to be accepted.

"There are many corporate headquarters in Beijing. A Fortune 500 company won't relocate to Baoding in Hebei, nor will jobseekers," said Liu Feifan, an analyst at Guotai Junan International.

To help curb migration to the city, Beijing authorities have limited the supply of new land to developers. Last year, just 420,000 sq metres of land zoned for residential development was released, compared with demand for an estimated eight million sq metres.

〈The Standard, March 23, 2017〉Li Ka-shing said strong affordability among buyers suggests Hong Kong's property market is unlikely to decline in the coming one to two years.

"I cannot see a trend of home prices decreasing," he said. "Purchasing power is strong in these two years, making for big profits." Li had advice to would-be purchasers. "If you are buying for speculation, don't. If you are buying for self- use, no matter how expensive or cheap the flat is, as long as you can balance your income and expenses, everyone should buy their own home."

Asked his views on mainland developers bidding up local land prices, he called them fair commercial decisions. Hong Kong residents - including me - don't have any say in it." Li said the SAR and global markets have changed a lot since his group's restructuring.

"Flour is more expensive than bread," he said, meaning land prices are higher than home prices. "It is unrealistic." The mainland market is different for him as there is an abundance of land there.

"Hong Kong is a small place where supply cannot meet demand. In addition, some mainland buyers are pushing up the local home price," Li said.

As for his outlook on the economy, Li said the retail and hotel sectors, both tourism related, fell sharply last year. "Among all our 13,000 stores globally, Hong Kong performed the worst."

〈The Standard, March 22, 2017〉Wheelock (0020) sold, as of 10 o'clock, last night 130 out of 168 flats that it offered in the third round of sales at its Monterey project in Tseung Kwan O and hoped to sell the rest before midnight.

Homebuyers' response was strong as they submitted about 4,000 subscription applications for only 168 units even after prices were raised by 2 to 3 percent.

Managing director Ricky Wong Kwong-yiu said Wheelock might further raise prices by 5 percent for remaining units in the project if the rest of the flats in the third batch would be sold last night.


Meanwhile, Poly Property (Hong Kong) received 920 subscription applications for 188 flats at Vibe Centro, a new project at Kai Tak, that it offered for sale.

Separately, Chinachem said it is raising prices for duplex apartments at its Golden Gate project in Tai Po. Director of sales Ng Shung-mo said standard units are priced at an average of HK$13,000 to HK$14,000 per square foot, while duplex apartments cost HK$14,000 to HK$15,000 per sq ft.

He said Chinachem is looking at lifting prices for duplex apartments by 8 percent.

The developer has sold a total of 102 units at Golden Gate since its launch in 2014. Only 25 units are left and a show flat has been set up.

Meanwhile, KWG Property (1813) chairman Kong Jian Min said the group and its joint venture partner, Logan Property (3380), plan to build a luxury housing project on the Ap Lei Chau site which they recently bought for HK$16.8 billion.