〈China Daily, September 15, 2018〉Real estate services provider Cushman & Wakefield are predicting that Hong Kong’s housing prices will remain stable in the short term.

However, interest rate rises, geopolitical uncertainty as well as the vacancy tax imposed by the government may pose major challenges for the city’s property market in future.

According to data compiled by Cushman & Wakefield, the number of commercial and residential sales and purchase agreements began to decline in the third quarter. The figures were 8,796 for July and 6,966 for August — after hitting a year-to-date high of 9,520 in June.

“Sales volume will drop further in September and should stay at 5,500 S and Ps (sales and purchase agreements) average per month for the fourth quarter,” Alva To, vicepresident and head of consulting for Greater China at Cushman & Wakefield, told reporters on Thursday.

To said current trade disputes between China and the United States would impact most on Hong Kong’s trading and logistics industry, which comprises 22 percent of the city’s total gross domestic product and 19 percent of its total employment.

“However, we may see a price correction in 2019 if current trade tensions escalate into a full-blown trade war, given the strong economic ties between Hong Kong and the mainland,’’ To said.

“The slowdown in the mainland economy will dampen purchase sentiment and affect local home prices. These could drop as much as 10 percent — a range that depends very much on how the trade war pans out,” he added.

〈Asian Post, Sptember 15, 2018〉Sun Hung Kai Properties, Hong Kong's largest developer by market capitalisation, said it netted HK$27 billion worth of contract sales in just 10 weeks, ahead of a looming vacancy tax and increasing mortgage rates.

The amount was 63.5 per cent of the HK$42.5 billion sales target the firm had set for Hong Kong during the financial year from from July this year to June next year.

"The government wants developers to sell flats fast, and we also want to launch more [units on the market]. So it is our strategy and also our response to the government's policy," said Raymond Kwok Ping-luen, the chairman and managing director of SHKP.

The sharp increase in contract sales follows the announcement of the vacancy tax by Chief Executive Carrie Lam Cheng Yuet-ngor on June 29, as well as other measures to unlock extra housing supply and cool down the city's property market.

SHKP, which holds the largest number of completed new flats in Hong Kong, is under pressure to pare its inventory.

In the past three weekends, the developer sold 593 flats at Cullinan West II atop Nam Cheong Station, which contributed HK$7 billion. It also offloaded 470 flats at Park Yoho Milano, generating more than HK$3.5 billion.

In its latest move, SHKP released the first price list for 144 flats at Park Yoho Napoli in Yuen Long on Tuesday, just 11 days after the project got presale consent. Park Yoho Napoli would be launched over the next two weeks, said Victor Lui Ting, deputy managing director of the developer.

〈China Daily, September 11, 2018〉A four-bedroom apartment at the Imperial Cullinan in Tai Kok Tsui has been rented out for HK$111 per square foot a month, the highest price in Kowloon, according to market sources.

The 1,443-sq-ft flat, which the owner acquired for HK$103 million in 2015, is fetching monthly rent of HK$160,000.

The second most expensive rented flat in the same district is at The Arch, at HK$93 per sq ft a month.

Meanwhile, property consultancy Cushman & Wakefield said home prices may come under pressure if a 100 basis points of mortgage rate hike is assumed by the end of next year. The increase in monthly mortgage payments will push affordability ratios up, resulting in more buyers failing the stress test, which in turn could reduce transaction volumes and cool investment sentiment, the consultancy said.

It said the weakness in the yuan could dampen mainland Chinese buying power for Hong Kong homes, while the struggles in the stock market could also impact the buying sentiment.

"More potential home buyers will adopt a wait-and-see approach amid rising uncertainties and transaction volumes are expected to fall in the remainder of 2018," said Reed Hatcher, Cushman's director and head of research in Hong Kong.

Price growth will remain at about 15 percent for mass residential homes for the entire 2018, but a correction of up to 10 percent may occur in 2019 should the impact of the uncertainties worsen, he added.

Local property transactions fell from 9,520 deals in June to 6,966 deals in August, down 26.8 percent.

〈The Standard, September 10, 2018〉Chinese property developers are offering free luxury cars and hefty discounts to lure buyers as lending curbs and funding constraints squeeze their finances.

China Merchants Shekou Industrial Zone Holdings is giving away a BMW Series 3 or X1 to buyers of a three-bedroom unit or townhouse at its Shanghai development. The car, or cash equivalent, equates to about a 10 percent discount on the 3.1 million yuan (HK$3.55 billion) price of the 89-square-meter apartment.

At China Evergrande Group's (3333) 646 nationwide projects, a basic 11 percent price cut widens to as much as 26 percent once extra perks, such as discounts to buyers referred by Evergrande employees or previous buyers, are thrown in.

An initial down-payment of just 5 percent is required, compared with the usual 30 percent deposit required by local governments. Developers are bridging the gap by offering multiyear installment plans as a way of getting around higher thresholds aimed at deterring property speculators.

The giveaways and discounts suggest debt-laden developers are pulling out all stops to raise revenue, with the sector facing a record US$23 billion (HK$180.52 billion) maturity wall in the first quarter of 2019. At the same time, China's determination to keep a lid on home prices has made it harder for developers to generate swift cash from sales.

"Financing is becoming hard for everyone, even including the giant players," said Sabrina Wei, head of northern China research at Cushman & Wakefield in Beijing. "They need discounts to boost sales and collect cash."

Developers in neighboring Hong Kong are also offering perks such as free holiday and travel packages and easy credit to lure buyers in a sign one of the world's hottest property markets may finally be cooling.

〈The Standard, September, 2018〉The National People's Congress in Beijing said it's giving high priority to a property tax that would be one of the biggest moves yet to rein in a runaway market.

Its standing committee listed the tax as one of 69 levies to have top priority in a five-year agenda, the Communist Party's mouthpiece People's Daily reported at the weekend. Enacting the real estate tax is "crucial," a committee official reportedly said.

The commitment adds to a drumbeat of statements from officials on the urgency and importance of pressing ahead with a levy that began to be trialed as long ago as 2011 in Shanghai and Chongqing. A national tax on home ownership has been seen as a key way of cooling speculation - but also potentially risky for the blow to market sentiment.

"The government in this term is much more determined on the property tax," said Xia Dan, a property analyst at Bank of Communications.

"Just think of how many signals have been sent by officials on various formal occasions."

China will likely pass legislation before the end of 2019, Wang Tao, head of China economic research at UBS Group in Hong Kong, wrote in January. Since President Xi Jinping began a second five-year term this year, efforts to prepare for a levy have included starting a national platform to register property ownership information.