No. of view: 6453
Property News Weekly Digest
2017/4/18
〈Asian Post, April 17, 2017〉Hong Kong's home buying fever continued unabated in the first quarter of this year, with buyers splashing out a record HK$47.5 billion on new flats - the biggest buying spree ever, according to the latest figures from Midland Realty, the city's only listed property agent. But industry experts are now predicting the trend to slow considerably, after the Hong Kong government on Wednesday issued a new policy. Any local first-time buyer of multiple units in one contract must now pay a 15 per cent stamp duty for each flat, finally closing a legal loophole left open since November.

In the first three months of 2017, there were more than 3,580 registered transactions in the primary residential market, a eye-watering 170.6 per cent rise from 1,323 deals a year earlier. "It is the highest transaction value for new flats in the first quarter since we started collecting the data in 1996, when only the government offered a breakdown of the numbers for residential and commercial transactions," said Buggle Lau Ka-fai, chief analyst at Midland. He attributed the hefty increase to the steep rise in home prices, which have encouraged developers to speed up their marketing for new project launches.

Year on year, the total transaction value for new private flats jumped 180.8 per cent from HK$16.91 billion in 2016, it said.

This surpassed the previous record of HK$36.9 billion set in the first quarter of 2004. "But the new tax policy will affect investor sentiment. The figure may fall [in the next quarter] if developers release more mass housing projects in the New Territories in view of fewer investors being allowed to buy several flats in the one go," Lau said.

〈China Daily, April 16, 2017〉Found at almost every major street corner across thousands of cities in China, McDonald’s and fast food outlets under Yum Brands such as KFC and Pizza Hut have long enjoyed a run of super-sized growth as local consumers craved a taste of Americana. The two fast food giants used to define China’s fast food segment, with the duopoly accounting for more than half of the market share in a country that has the world’s largest food service industry.

It is hence unsurprising that both companies have now decided to shed their once lucrative Chinese assets at a similar timing, leaving people wondering whether their dominance over the past two decades has inevitably faded.

After a prolonged struggle to attract buyers, McDonald’s announced in January that it would sell 80 percent of its shares in the Chinese mainland and Hong Kong to Chinese investment conglomerate CITIC Group, CITIC Capital and Carlyle Group. The move will give the buyers a controlling stake in the brand’s chains in the region.

Phyllis Cheung, CEO of McDonald’s in China, said the move would help unlock more capital as part of the company’s turnaround plan. She sees the franchise model as an effective way to spur growth potential in China’s thirdand fourth-tier cities, and improve flagging performance in existing stores.

“Financial strength” and “unmatched understanding of the local market”, said Cheung, were the reasons the fast food giant decided to pick the CITIC-led consortium.

“CITIC’s real estate networks and strategic alliances with developers including Vanke and China Resources may potentially open up more opportunities,” said Cheung.

Meanwhile, Yum has also decided to separate its Chinese entities, albeit using a different approach: initial public offering. In November, the fast food giant spun off its China business in a New York Stock Exchange listing, with Yum China being a licensee of its parent company.

〈Asian Post, April 15, 2017〉Authorities in Hong Kong are hoping for some success in their faltering attempt to rein in soaring real estate prices

Thwarting canny speculators appears to be turning into a herculean task for the government which has so far failed to arrest runaway property prices.

Take the latest government effort to drive out speculators by plugging a legal loophole which allowed first-timers to buy multiple properties in a single sale and purchase agreement, thus avoiding the 15 per cent stamp duty.

On Tuesday, Chief Executive Leung Chun-ying said that Hong Kong homebuyers purchasing more than one flat at a time would no longer be able to avoid paying the 15 per cent stamp duty.

The loophole was revealed by the South China Morning Post last November, days after the government more than doubled the stamp duty to a flat rate of 15 per cent for all residential purchases in a bid to curb spiralling property prices.

However, first-time buyers were exempt, allowing speculators to lump several purchases together into a single transaction.

Media reports have revealed that more than 420 registered sale and purchase agreements, for some 950 flats since November, involved single buyers acquiring more than two units at a time.

In one case, a buyer snapped up 15 units for more than HK$145 million at K City in Kai Tak in a single transaction.

Financial Secretary Paul Chan Mo-po also cited figures showing the incidents of multiple purchases in a single agreement jumped from around 50 in February to 180 in March. The number has been about 20 to 30 a month since last November.

〈China Daily, April 14, 2017〉Wily buyers appear to have found a workaround for the Hong Kong government's new stamp duty rule, barely a day after the outgoing Chief Executive Leung Chun-ying announced he 's closing a five month tax loophole to help his successor to get a handle on the city's runaway property prices.

During a Wednesday sale at Cheung Kong Property Holding's Harbour Glory apartment project in North Point, a family bought three apartment units for a combined bill of about HK$170 million after discounts. Because they split their purchases into three individual names - each name not being a prior property owner - they were able to skirt the government's 15 per cent stamp duty on multiple purchases in one go.

"It's not illegal, but it's creative," said Sammy Po, chief executive of Midland Realty's residential department. "Whenever there's a new policy, buyers and sellers always come up with a way to minimise the impact."

Po's realty firm brokered the purchases by two groups of customers, each buying two units of three-bedroom apartments at Harbour Glory.

One group comprises a father and his son, who each bought an apartment measuring 1,062 square feet on different floors in the same block, for a total price of more than HK$60 million, after a 34 per cent discount by the developer.

"As the two flats were bought in two separate contracts, and neither of them owned properties under their names, they are not subject to the 15 per cent stamp duty," Po said. Each buyer is liable for a 4.25 per cent duty, equivalent to HK$1.27 million.

〈China Daily, April 13, 2017〉Hong Kong-listed real estate developer Central China Real Estate has set an ambitious goal of tripling sales by 2019, a move that could challenge the abilities of senior management, including its new chief executive officer Yuan Xujun.

Despite a boom in China's property market in the past two years, Central China Real Estate, the biggest developer in Henan province, has seen sales growth lag behind its rivals, with 2016 net profit of 403 million yuan (HK$454.4 million), roughly half from the previous year.

The company said during its annual results announcement on March 24 that it will not distribute a final dividend for 2016, making it the first time it has failed to do so since its 2008 listing in Hong Kong.

Founder and chairman Hu Baosen said the profit result was dragged by construction delays related to environmental protection requirements in Henan and the company's aggressive business diversification plan in the past few years, including a 3 billion yuan investment to build six hotels.

The company said it planned to boost residential sales to catch up with the aggressive sales targets of its competitors. This year the company has set a contracted sales target of 26.8 billion yuan, representing 33 per cent growth from 20 billion yuan in 2016.