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Property News Weekly Digest
2019/3/2
〈Asian Post, March 2, 2019〉Property sales in Hong Kong plunged nearly 33 per cent year on year in February as investors and homebuyers stayed on the sidelines, unsure whether prices were likely to fall further.

A total of 5,002 transactions for flats, offices and car parks worth HK$41.9 billion was reported last month, down from HK$62.6 billion in February 2018, according to data from Centaline Property.

"Investment sentiment was still quite sour in February, and buyers were reluctant to make a move," said Derek Chan, head of research at Ricacrop Properties.

Data from mReferral Mortgage Brokerage Services showed that the number of loan applications for lived-in homes in February fell 20 per cent to 6,791. New flats dropped 18.1 per cent to 998.

"Homebuyers tend to take a wait-and-see attitude after seeing flat prices decline for several months," said Sharmaine Lau, chief vice-president at mReferral.

City finance chief Paul Chan Mo-po said during his budget presentation this week that the government had to adjust its annual revenue estimates to HK$596.4 billion, about 1.3 per cent lower than originally projected, owing to lower than expected revenues from land premiums and stamp duties.

Developers have doubled down on the marketing of new projects to shore up revenue.

Sun Hung Kai Properties, Hong Kong's largest developer by market value, and New World Development, the fourth-largest builder, are expected to release more than 3,600 units over the next six months.

〈China Daily, March 1, 2019〉Hong Kong property developer Sino Land reported a 73 per cent drop in underlying net profit attributable to shareholders for the July to December period, largely owing to one-off asset disposals in the year earlier period.

Underlying profit, excluding the revaluation gains on investment property, was HK$2.37 billion compared to HK$8.93 billion in 2017, according to a filing with the Hong Kong stock exchange yesterday.

Revenue jumped 17 per cent to HK$4.59 billion, slightly lower than the HK$4.62 billion consensus in a Bloomberg survey.

Sino Land said core earnings in the same period last year were HK$3.27 billion when excluding a one-off gain on the disposal of an 80 per cent interest in The Palazzo development in Chengdu.

Analysts said Sino Land would likely show a stronger result in the fiscal second half thanks to upcoming home sales.

"Strong sales from the Grand Central development in Kwun Tong will boost second-half earnings," said Kenny Tang Sing-hing, chief executive of China Hong Kong Capital Asset Management.

Tang said home buying sentiment would improve as a result of the postponement of interest rate rises by the US Federal Reserve.

〈China Daily, March 1, 2019〉A prime commercial site on top of Hong Kong's high-speed rail terminus will be sold to developers in the first half of the year, with 2019 expected to see the highest supply of floor space for offices and businesses in two decades.

The 5.88-hectare site at the West Kowloon station was one of 22 residential and commercial lots on this year's official land sale list unveiled by the government yesterday.

The expected yield of private flats from this year's land sales and other projects, however, would be the lowest in almost a decade.

Announcing the land sales programme for 2019-20, Secretary for Development Michael Wong Wai-lun said the government intended to sell the huge West Kowloon site as a whole, instead of carving it up for separate sales, as some had speculated.

"In terms of design and management, we believe it is beneficial to sell the site as a whole," Wong said.

But Thomas Lam, executive director of Knight Frank in Hong Kong, said this might lead to selling difficulties.

"The total value is too large and I'm not very optimistic that it can be sold easily as a whole," Lam said. "To be sure, developers are interested in the site because of the location, but no single developer now has the ability to put so much money in one site.

〈The Standard, February 28, 2019〉The 15 residential sites in the 2019-2020 land sale program will only offer 8,850 units, which is lower than last year, while government data showed housing prices rebounded in January after falling since August.

The Development Bureau said the 15,540 total units, includes the 8,850 units in the land sale program, and other private projects.

Seven out of 15 residential sites in the program are new residential sites in Ap Lei Chau, Sai Kung, Tai Po, Tai Hang, Nam Fung Road and two sites in Tuen Mun.

Six out of 15 are large sized land, which can offer at least 500 units each, while five of them are small land, which can only offer less than 100 units each.

Two lands in Kai Tak will be the first to open for tender this financial year and are 1.8353 hectares and 0.9481 hectares respectively.

Meanwhile, seven commercial lands will also launch this financial year. The first plot open for tender would be on the rooftop of Hong Kong West Kowloon Station, with 5.88 hectares.

The market expects the land would value between HK$79.1 billion and HK$110.74 billion and possibly with the first land sold worth over HK$100 billion.

In other news, the local property market recovered as the January private property selling price index rose for the first time since August at 359.5 points, up 0.08 percent on a monthly basis and up 0.3 percent on a yearly basis, according to data from the Rating and Valuation Department.

〈Taipei Times, February 28, 2019〉Hong Kong yesterday unveiled a less expansionary budget for fiscal year 2019-2020, though with relief measures for individuals and businesses at a time of economic uncertainty and trade tensions as growth slowed sharply.

Hong Kong Financial Secretary Paul Chan (陳茂波) said that annual growth halved in the fourth quarter last year, and the outlook for the territory is clouded by a trade dispute between Washington and Beijing.

Hong Kong’s open and trade-reliant economy has been buffeted by external risks, including an economic slowdown in China, cooling property prices and stock market volatility.

The economy grew 1.3 percent in the fourth quarter from a year earlier, the weakest increase since the first quarter of 2016, and slower than downwardly revised 2.8 percent growth in the previous three months, Chan said.

The economy grew 3 percent for the full year, slightly slower than the government’s forecast of 3.2 percent.

ING Group Greater China economist Iris Pang (彭藹嬈) said in a report that the weaker than expected growth was due to a spillover from the US-China trade dispute.

"This was mainly a result of the trade war, which dampened export activities and related jobs in Hong Kong, and on the mainland, with negative feedback into consumption in Hong Kong," Pang said.

The trade-reliant economy is forecast to expand between 2 and 3 percent this year, and average 3 percent growth from next year to 2023, Chan said in his televised budget speech.