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Property News Weekly Digest
2019/2/23
〈Asian Post, February 23, 2019〉Sino Land sold only four out of the 129 flats available at its Mayfair by the Sea 8 project in the New Territories yesterday as the housing market made a sluggish start to the Year of the Pig.

Three flats were sold through tender, with the fourth, a 685 sq ft unit, going via public sale for HK$9.99 million, or HK$14,588 per square foot. The price, on a per square foot basis, was 22 per cent below that of Sun Hung Kai Properties' (SHKP) The St Martin development nearby, which sold in July last year.

"It is really bad," said Alvin Cheung Chi-wai, associate director at Prudential Brokerage. "Now lower prices are not enough. You have to be much cheaper to match public expectations."

Separately, local developer Magic Sight Holdings' AVA 228, a tiny-flat project in Sham Shui Po, had sold 46 units out of a total of 82 on offer by 9pm yesterday.

The developer, a privately held firm owned by property investor Lo Wah, has priced the smallest units in the initial batch, measuring 151 sq ft, at HK$2.8 million, or HK$18,563 per square foot, according to a price list released on Thursday.

The flats were the most affordable available in the market since February 2016, when a 299 sq ft flat at SHKP's Twin Regency in Yuen Long was offered for HK$2.8 million.

Low-price strategies, which have been in effect since December, has failed to woo Hongkongers amid a softening housing market.

In December, Sino Land was the first in the city to offer steep price cuts, selling its Grand Central development in East Kowloon at a 14 per cent discount. More than 90 per cent of the flats on offer sold quickly. All but 70 of 288 units were also sold at Mayfair by the Sea 8 when the development debuted on January 29.

〈Taipei Times, February 22, 2019〉Beijing’s plan to create a ‘Greater Bay Area’ aimed at rivaling Silicon Valley is expansive, but short on details of how it is going to integrate the region’s differing legal, customs and tax systems

China’s long-awaited plan to create a high-tech megalopolis on its southern coastline rivaling California’s Silicon Valley generated optimism among Hong Kong’s business community even as key details remain unclear.

The blueprint for the Greater Bay Area linking China’s southern coastal cities with Hong Kong and Macau, a signature policy of Chinese President Xi Jinping first articulated in 2017, boosted stocks after it was published late on Monday.

It said the government would turn the area into a leading global innovation hub, boost infrastructure connectivity and strengthen Hong Kong’s role as an international center of finance, shipping, trade and the offshore yuan business.

Yet several thorny issues were left out of the plan, including complex questions about which customs, tax and legal systems would predominate.

In Hong Kong, the concept of the Greater Bay Area has led to worries that further integration will erode the "one country, two systems" framework that allows the territory to maintain separate legal, monetary and political systems from China.

"It is a generic, wide guide on what’ll be encouraged and what’ll be promoted, but it doesn’t have a clear explanation on detailed measures," said Serena Zhou, desk economist at Mizuho Securities Asia in Hong Kong. "The biggest challenge for the Greater Bay Area is how to unify a tax system, as tax policy is an important matter in talent flow."

If all goes as planned, the economic benefits could be substantial: HSBC Holdings says the move to knit Hong Kong, Macau, Shenzhen and Guangzhou together could boost a trillion-US dollar economy that exports more than Japan.

〈China Daily, February 21, 2019〉Monetary Authority head set to leave after tenure marked by efforts to protect banks from volatile property market and lift the city's global profile

Hong Kong Monetary Authority (HKMA) chief executive Norman Chan Tak-lam will step down in September when his contract ends, after a tenure that has been built on pushing banks to gird themselves against the city's volatile property business.

The government announced the departure of Chan, who turns 65 in October, yesterday afternoon, confirming an exclusive report by the South China Morning Post earlier in the day.

The career civil servant, who started his public service during colonial days as an administrative officer, is most closely associated with the eight rounds of mortgage tightening measures that reduced banks' exposure to property downturns.

While the policies strengthened banks, they pushed the city's residential property prices beyond affordable levels for many first-time homebuyers.

"Having worked for 43 years after graduation, I felt that now is the right time for me to retire and spend more time with my family," Chan said in a statement issued by the HKMA.

"It has been a great honour for me to work with colleagues at the Hong Kong Monetary Authority to safeguard Hong Kong's monetary and financial stability, as well as to enhance our competitiveness and position as an international financial centre."

Financial Secretary Paul Chan Mo-po will head a selection panel that will include former HKMA chief executive Joseph Yam Chi-kwong to vet candidates to take over the top job.

〈Asian Post, February 20, 2019〉Hong Kong property developer Chinese Estates Holdings said yesterday it expected a drop as much as 78 per cent in its net profit for 2018, which it said was down to poor sales performance and losses on investments.

Net profit attributable to its shareholders will drop between 68 per cent and 78 per cent from the HK$3.7 billion in gains reported in 2017, according to a company filing with the Hong Kong stock exchange ahead of its annual results release.

Revenue for 2018 is expected to plunge 39 to 49 per cent from HK$1.5 billion in 2017.

The developer also highlighted a HK$3.1 billion unrealised loss on its investment in the shares of mainland developer China Evergrande Group.

The company, which is chaired by Lau Ming-wai, son of property tycoon Joseph Lau Luen-hung, said a drop of about 70 per cent in property sales was the main reason for the poor results.

Last year, the company sold only one residential unit at its 55 Conduit Road luxury development. The deal for the 4,170 sq ft flat, together with two car parks, contributed a total of HK$274 million to Chinese Estates' revenue.

Home prices in Hong Kong, the most expensive real estate market globally, tumbled 9.2 per cent between August and December last year amid headwinds ranging from rising mortgage rates and a cooling economy to uncertainties around the US-China trade war.

Chinese Estates was also a victim of the bearish Hong Kong stock market, which slumped 13.6 per cent last year, its worst performance in seven years.

〈Taipei Times, February 20, 2019〉Hong Kong earmarked a slice of its historic Fanling golf course for public housing, a controversial plan that exposed the territory’s dramatic social divide and was resisted by international golf stars.

The Hong Kong government said it had accepted a proposal to take back less than one-fifth of the exclusive, 170-hectare course as authorities scramble to find new land for housing in the world’s least-affordable property market.

The colonial-era course is part of the Hong Kong Golf Club and has hosted the Hong Kong Open, a mainstay of the European and Asian Tours, every year since 1959.

The club has argued that sacrificing a world-class sports venue is short-sighted, a stance echoed by top golfers who spoke out against the plans, including Rory McIlroy and local star Tiffany Chan.

However, campaigners said that the prime spot should not remain a playground for the wealthy elite in a territory crying out for cheaper homes and more space.

Hong Kong Chief Executive Carrie Lam (林鄭月娥) yesterday told the Hong Kong Legislative Council that she accepted the decision would "offend and upset some people," but her administration has "to strike a balance in a difficult situation for the greatest public good."

The complex is an oasis of ancient trees and diverse wildlife, including turtles, owls and butterflies.

The oldest of its three 18-hole courses was built in 1911 on land that was home to the centuries-old graves of indigenous clans, whose descendants now have to skirt the greens to pay tribute to their ancestors.