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Property News Weekly Digest
2018/11/24
〈America News, November 24, 2018〉With prices expected to fall, the desire to purchase property has increased, however current prices are still making buying property an unachievable dream for many.

In fact, 73% of Hong Kong people would require financial assistance from parents if they were to make a property purchase. The survey also showed that the demand for nano flats had fallen sharply (41% down to 13%) compared to the first half of the year, while the Greater Bay Area has become a popular choice for overseas investment.

Ms. Nerida Conisbee, Chief Economist, REA Group, commented that the findings of the report on the current Hong Kong real estate were significant, especially during times of dramatic property market change.

"What a difference six months makes. In our previous survey, the Hong Kong market was red hot and respondents thought prices would rise by more than 10% in 12 months. What actually happened was vastly different. Prices started dropping around 5% in July on Hong Kong Island, prompting respondents in this survey to suggest that prices had further to fall, estimating a 12% drop over the next year.

A number of factors have driven the decline and are likely to continue to contribute to falling prices. The biggest concern is the US-China trade war and the impact that will have on economic growth. Rising mortgage rates, stock market jitters and potential oversupply are also concerns.

While declining prices worry a lot of people, they are not always bad news. Hong Kong is the least affordable city in the world and many are concerned that they would never be able to buy in this market.

Unaffordable prices put pressure on the government to supply housing which is expensive. Hong Kong also risks losing young people to other countries if they cannot afford to buy."

〈Asian Post, November 23, 2018〉Hong Kong retailers should brace for a slack Christmas season because the appetite of shoppers has been dampened by volatile stock and property markets, a weaker yuan and the ongoing US-China trade war, according to the new head of a local industry association.

Annie Tse Yau On-yee, who was elected chairwoman of the 9,000-member Hong Kong Retail Management Association last month, yesterday said Christmas sales would at best be flat compared with last year, partly because of high growth a year ago and the current hostile operating environment.

She said overall retail sales between October and December would be lacklustre, having shrunk gradually since February, from 29.9 per cent growth to September's 2.4 per cent rise.

"The outlook is very uncertain," Tse said. "We have seen the impact of the trade war surface, which together with yuan depreciation has dampened mainland visitors' desire to come and shop in Hong Kong."

The government is expected to reveal October's retail sales figures on November 30.
For 2018, Tse said she expected a "high single-digit rise" after an 11.1 per cent jump in the first nine months of this year.

Hong Kong has been trapped in the trade war between China and the United States, which have imposed punitive tariffs on each other since July. Vincent Lo Hong-sui, chairman of the city's trade promoter, the Hong Kong Trade and Development Council, warned earlier this month that the upcoming Lunar New Year, in early February, would be a testing time for the city's economy as the trade war intensified.

〈China Daily, November 23, 2018〉Hong Kong developers are offering discounts at new projects in the latest sign the territory’s housing boom is coming off the boil.

Country Garden Holdings Co and Wang On Properties Ltd are giving discounts of as much as 12 percent at their Altissimo project in the New Territories, a price list showed.

Employees of the two developers are granted an additional 5 percent deduction. Lai Sun Development Co has cut prices 10 percent at eight units in a project on Hong Kong Island.

Developers have been offering discounts and enticements including cash rebates and shopping vouchers. New home sales might fall as much as 10 to 15 percent by value in the next year to 18 months, Moody’s Investors Service said on Wednesday.

That added to a chorus of bearish calls on a property market ranked the world’s least affordable, with some analysts forecasting prices would slump as much as 15 percent next year.

The discounts were announced after secondary-home prices last week dropped the most since 2016, sliding 1.3 percent from the previous week, according to the Centa-City Leading Index.

Country Garden, China’s biggest developer by sales, raised HK$7.83 billion (US$1 billion) in a convertible bond sale as it takes on higher-cost funding to push out repayments. The company priced its sale of five-year convertible bonds with a 4.5 percent coupon, according to a Hong Kong exchange filing yesterday.

〈The Standard, November 22, 2018〉More price-cutting deals have been recorded in the local market with a home in Eltanin.square Mile in Tai Kok Tsui selling for HK$5.1 million or HK$20,565 per sq ft, the lowest price for this year at the development.

The owner sold the 248-square-foot flat soon after meeting the exemption requirement for special stamp duty.

A 517-sq-ft flat in Laguna City in Kwun Tong meanwhile changed hands for HK$6.6 million or HK$12,766 per sq ft, down from the asking price of HK$7.8 million in October and 17.5 percent lower than the market estimate. This is the first time this year that a home sold for below HK$7 million in the estate

A unit in Banyan Garden with an area of 477 sq ft sold for HK$7.2 million or HK$15,094 per sq ft, down from the asking price of HK$9.2 million in September and 15 percent lower than tan this year's highest price, back to the level seen in March last year.

A 284-sq-ft foreclosed unit in City One Shatin was offered for HK$4.18 million, 30 percent lower than the highest price, while a 457-sq-ft unit in Kingswood Villas in Tin Shui Wai changed hands for HK$4.38 million, down 16 percent from the asking price.

The Urban Land Institute reported Hong Kong's investment prospect rankings in terms of real estate in 2019 has fallen by one spot to 14, while development prospects dropped by four spots to 18, compared to previous year.

Despite two years of falling rents and values, residential and office values remain at world high record levels, an Emerging Trends in Real Estate Asia Pacific surveys showed.

〈The Standard, November 21, 2018〉Sky-high property prices in Hong Kong are forcing prospective buyers to look overseas, a new survey shows.

The survey conducted by REA Group revealed that 14 percent of the respondents said they would consider to purchase properties in neighboring countries over the next 12 months.

Of these, 38 percent said they would consider mainland China, 35 percent opted for Japan while 19 percent mentioned Taiwan as their destination of choice, according to the group, which is a multinational digital advertising business specializing in property.

"Those who intend to invest in Greater Bay Area should clearly understand the risks associated with purchasing property in the area before making a decision," said Kerry Wong, chief executive director, greater China region, REA Group.

Only 13 percent of respondents would consider to purchase nano flats, down significantly from 48 percent half a year ago, as they found challenges living in a small place with family, or would prefer invest in somewhere else.

The key reason for the huge drop in the intention to purchase nano flats is in part due to the launch of the home ownership schemes flats that offer 48 percent discount, said Wong.

The survey, which received more than 1,000 responses, also found that 80 percent of respondents said they would hold back their property purchase plans as interest rates increased.

Around half of the respondents believe that home prices will drop in the next six months. The average per-square-foot price in a major housing estate in Kowloon this month dropped more than 20 percent from September, according to Centaline Property.