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Property News Weekly Digest
2017/10/7
〈Asian Post, October 4, 2017〉Carrie Lam's Starter Homes scheme offers hope for those who can't pay high market prices, but demand is likely to exceed supply

Yuen Yuk-ting had her life planned out at the age of 26. She would open a bank account with her boyfriend, spend the next four years saving HK$1 million for a down payment on a 400 sq ft flat, and then get married at 30.

But that dream was thrown off track when she found out she was pregnant last year. "Having a baby was of course the greatest thing to happen to us, but at the same time, buying a flat just became a lot harder than it already was," Yuen, now 28, said.

She rents a 270 sq ft flat in Chai Wan for HK$10,300 a month, living with her husband, eight-month-old daughter and mother-in-law and brother-in-law, who sleep on their living room sofa.

The family have a combined household income of more than HK$52,000, which means they do not qualify to buy one of the heavily discounted flats under the government's subsidised housing scheme. But neither do they earn enough to afford a flat in the city's red-hot private property market.

Yuen's plight is typical of that among many middle-class families, many of whom have fallen through the cracks and failed to get on the housing ladder as property prices have spiralled upwards, far outpacing wage gains.

But a new government-subsidised property scheme to help first-time homebuyers is looking to fill that gaping hole.The "Starter Homes" scheme, an election pledge by Chief Executive Carrie Lam Cheng Yuet-ngor, will be formally announced in her maiden policy address next week.

〈Asain Post, October 4, 2017〉Imagine an office across from a big park, beside a river and next to an MTR station in the heart of the city.

Nan Fung Development has envisioned something similar with its commercial site in the Kai Tak area, which promises to be a unique selling point in the city's next central business district, and something which is currently not on offer in Central.

"Our site is situated beside the Kai Tak River, next to the proposed Kai Tak MTR station and across from a big garden. Together with nearby cultural and leisure facilities under construction, the whole area will attract start-ups and creative enterprises," said Donald Choi Wun-hing, the managing director of Nan Fung Development.

In May, cash-rich Nan Fung Development, the textile producer that morphed into a developer of exclusive real estate in the city, won a commercial site in Kai Tak area for a record HK$24.6 billion, smashing the previous world record price set by the Murray Road site in Central during the same month.

The Kowloon East site, designated for office, retail or hotel development, will yield a total gross floor area of 1.91 million square feet.

The price represents HK$12,863 per square foot, 91 per cent higher than a nearby site won by Sogo department operator Lifestyle International Holdings in November 2016.

The department store operator won the site to house the city's first twin tower development, for HK$7.39 billion, or HK$6,733 per square foot.

〈The Standard, October 3, 2017〉Major Hong Kong developers are lining up to launch new residential projects and put more flats on the market.

CK Asset Holdings' (1113) senior sales manager Cannas Ho Ka-yan said the company will upload sales brochure for My Central - its joint project with the Urban Renewal Authority on Graham Street - and likely open show flats this week.

She said the first price list of the 185-unit project will comprise no less than 50 flats, and will include three- bedrooms between 906 and 996 saleable square feet.

Meanwhile, Sun Hung Kai Properties (0016) yesterday released its fifth price list for 169 flats from its Lohas Park project, Wings at Sea. Listed prices for the latest batch range from HK$5.78 million to HK$13.15 million. SHKP will put on sale 328 flats from Wings at Sea in the third round of sales on Saturday.

The developer said it sold all 403 flats available from Wings at Sea last Saturday.

Separately, HKR International (0480) assistant general manager of sales and marketing Pandora Chan Sau- chun said the company plans to announce the sales arrangement for units from its joint project with Nan Fung Group in Kau To Shan - La Cresta - in the next one to two weeks. Chan said the firm is inclined to sell the total of 61 villas and apartments by tender, and expects the apartment units to be marketed first.

〈The Standard, October 3, 2017〉Sun Hung Kai Properties (0016) launched an additional 191 flats at its Lohas Park project Wings at Sea on Sunday after a promising sales performance at the weekend.

The listed prices for the latest batch of flats range from HK$5.45 million to HK$21.09 million. The average discounted price per saleable square foot is HK$14,535.

SHKP sold all 403 flats available for sale at the Lohas Park project on Saturday. The developer will put on sale 32 flats on Thursday.

Meanwhile, home prices hit all-time highs this year, shrugging off government restrictions to cool the market and worries that another real-estate crash could foul up the wealth of its 7.4 million people and destabilize its financial system.

Centaline Property's Centa-City Leading Index has risen 11 percent this year, bringing gains in the past five years to more than 60 percent. Private home prices in Hong Kong rose for a 17th straight month in July, the latest Rating and Valuation Department data show.

It now takes a household 18 years of median income to buy a home in Hong Kong, more than anywhere else in the world, data from Demographia show. That compares with just over 12 years in Sydney, 8 in London and under six years for the wider New York metropolitan area.

Hong Kong's government in May tightened rules on bank lending in housing over worries about banks' exposure to the real estate industry as developers bid up land prices.

In the secondary market, statistics from Midland Realty showed there were 10 deals recorded during the long holiday weekend, from September 30 to October 2, at the 10 major estates it tracks.

〈Asian Post, October 2, 2017〉The glitz of Harbour City, Hong Kong's largest shopping centre, belies its sombre past.

In 1983, renowned architect Eric Cumine was sued by the mall's developer Wharf Holdings, partly for not maximising the total floor area available for development in his design.

On the facade along Canton Road in Tsim Sha Tsui, Cumine left several wide openings at ground level for better access. But to a developer, such open spaces should have been enclosed for more profitable rental space.

"You left some [floor area] unused," Wharf claimed. "We have suffered loss as a result of that".

Cumine won an eight-year legal battle, but it was a tragic victory for the then 86-year-old. His firm folded during the tussle and he was paralysed after a stroke.

It became a cautionary tale for real estate professionals about the potential consequences of failure to maximise profit for developers.

"Hong Kong's land prices are too high," architect Simon Hui Wan-heng said. "We are held accountable by our employers and they are held accountable by their shareholders. Everybody is mindful of profit. As far as I know, most developments in Hong Kong had [their floor areas] used up to the highest potential".

Legal framework We are held accountable by our employers ... Everybody is mindful of profit Simon Hui Wan-heng, architect To many architects and surveyors, profit maximisation requires them to explore the most efficient way of filling developable floor areas within the legal framework, but the framework is so stringent it stifles their creativity.

Although Chief Executive Carrie Lam Cheng Yuet-ngor is not expected to talk about building regulations in her policy address on October 11, experts believe this is a crucial time for a review.