〈Macau Times, January 5, 2019〉Hong Kong has a USD64 billion plan to build islands for new homes Natalie Lung Hong Kong, the world’s least affordable property market, has a plan to tackle its housing crisis: build four artificial islands equal to about a fifth the size of Manhattan that could house more than a million people.

The government-backed plan to create a gleaming property and commercial hub has been tried before—Palm Jumeirah, the palm-shaped archipelago in Dubai filled with luxury developments; Forest City, a housing project for 700,000 people in Malaysia; and Jurong Island in Singapore, which houses chemical and energy facilities.

Yet building artificial islands in Hong Kong has a number of vexing complications, starting with the price tag. It’ll cost at least an eye-popping USD500 billion in Hong Kong dollars ($63.8 billion), the South China Morning Post reported, and the tab could double. There are also technical and political challenges—a November poll showed 49 percent of the public opposes the plan—as well as massive environmental costs, though the government says it has chosen a less ecologically sensitive area for development.

Hong Kong’s plan to create islands in open waters shows the length governments will go to add housing in expensive, space- starved cities. The rising threat from climate change is also giving governments reason to create “smart and low-carbon” cities, which Hong Kong’s government is planning to achieve for the new islands with renewable energy, green transport and a higher greening ratio.

〈Sing Tao, January 4, 2019〉The Fed ignored US President Donald Trump's repeated warnings and raised interest rates by a quarter-point as scheduled. US stocks made a single-day reversal while European and Asian markets also dropped. However, the Fed said hikes next year would be more gradual. It sounded more "dovish" than before, which would not cause long-term panic in the market. The pressure for a rate hike in Hong Kong may ease.

The Fed raised interest rates 76 times in 28 years with only twice during a market decline. The most recent was 14 years ago. The Wall Street suffered from a rate hike in a falling market with the DJIA hitting a new low this year.

As the December tax reduction effect has almost faded while prospects for the commodities and property markets as well as corporate profits were no longer optimistic, the Wall Street wants the Fed to stop rate hikes to "rescue the market". Trump, who craves for greatness and success, wants a "boost" from the Fed regardless of the economic situation. Before Fed's Tuesday meeting, he urged it in his Twitter account not to "make a mistake". Even the Wall Street Journal wants an end to the rate hike cycle.

Unlike the rate hike announcement in September, the Fed lowered the economic growth forecast this year from 3.1 to three per cent and that for the following year lower by two percentage points to 2.3 per cent. In addition, the lower inflation forecast amid falling oil prices provides room for easing rate hikes.

〈China Daily, January 3, 2019〉2018 was a year many investors would want to forget. The benchmark indicator of Hong Kong stocks closed almost 14 percent down on the year, marking an end to the long rally in the previous few years.

Other major Asian stock markets did even worse — the Shanghai Composite Index fell a whopping 25 percent in 2018 and Japan’s Nikkei dropped almost 15 percent.

On Wall Street, the Dow ended the year down 5.6 percent and the S&P 500 fell 6.2 percent. In comparison, the tech-heavy Nasdaq lost a more modest 3.9 percent.

The question many investors are asking in the beginning of the new year is whether the market is bottoming out. Predictions of the market experts vary widely. Some recommended mainland stocks, many of which are listed in Hong Kong, arguing that the government would use every means at its disposal to stimulate economic growth which would indirectly prop up the stock market.

But prospective bargain hunters have remained cautious because of the downside risks arising from the trade dispute between the United States and the Chinese mainland and the uncertain prospects of the Hong Kong property market.

Earlier this week, investors’ mood was lifted by indications of a possible easing of tension in the trade dispute. But there are numerous thorny issues that need to be resolved before any sort of agreement can be reached.

The Hong Kong government is preparing for the worst. Financial Secretary Paul Chan Mo-po noted in his blog that he is considering counter cyclical measures in his budget to boost economic growth and protect jobs.

〈Asian Post, January 3, 2019〉Despite a 38 per cent discount, would-be buyers say flats offered by the Urban Renewal Authority at the eResidence in Hung Hom are far too small

Small as it might be, a 300 sq ft, one-bedroom flat in a new development in Kowloon going for HK$3.9 million would be considered a bargain in Hong Kong's red-hot property market and for an aspiring homeowner such as Stephy Ma, it is her only shot of ever owning a new flat.

"It's not a reasonable price at all for such a small flat, but we don't really have much choice here, do we?" Ma said.

Ma was one of more than 700 people who took a tour of show flats for the city's first batch of subsidised starter homes yesterday when the scheme opened for applications.

The 450 flats in Hung Homare part of a new government initiative aimed at helping eligible middle-class families and single, young professionals to get on the property ladder by offering them units at a 38 per cent discount to the market price.

The flats, ranging in size from 261 to 507 sq ft, are priced at between HK$3.14 million and HK$6.6 million.

The Urban Renewal Authority (URA), which was invited by the government in July to test the starter homes scheme, said 82 per cent of the flats at the"eResidence" project in Hung Hom were studio and one-bedroom flats, while the rest were two-bedroom units.

〈Asian Post, January 2, 2019〉Claiming areas back from the sea at same time in Hong Kong and Shenzhen could drive up costs for the giant projects, analysts warn

Industry experts and academics say that attempting to undertake two major land reclamations in Hong Kong and Shenzhen at the same time could strain the resources of the "Greater Bay Area" (GBA), ultimately increasing the costs of the already multibillion-dollar projects.

The official blueprint for the GBA will only be revealed early this year, and will outline Beijing's grand plan to integrate Hong Kong, Macau and nine southern mainland cities - Guangzhou, Shenzhen, Zhuhai, Foshan, Zhongshan, Dongguan, Huizhou, Jiangmen and Zhaoqing - into one huge metropolis.

But Hong Kong's controversial Lantau Tomorrow Vision development project, in particular, already faces daunting cost estimates, which could be further increased if it does not have access to abundant supplies of relatively cheap landfill material.

Competition with Shenzhen for those supplies could create a major cost overrun for the project, which was disclosed by Chief Executive Carrie Lam Cheng Yuet-ngor in her annual policy speech in October.

The Lantau scheme, covering the reclamation of 1,700 hectares from the sea, involves the construction of artificial islands off Lantau in western Hong Kong.

But without proper coordination and planning among officials and governments in the GBA, the land reclamation projects could create scheduling chaos and drive up costs throughout the region, analyst said.