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Property News Weekly Digest
2019/4/27
〈China Daily, April 27, 2019〉The number of new flats completed in Hong Kong plunged by 88 per cent to just 1,000 in the first three months of the year, with agents attributing the decline in part to concern among developers over the impact of the government's planned vacancy tax.

It is the lowest number since the first quarter of 2015, and is down from 8,300 in the October to December period, according to figures released by the Transport and Housing Bureau yesterday.

"The vacancy tax may be one of the reasons for the fall in the completion of new flats," said Derek Chan, head of research at Ricacorp Properties.

He said seasonal factors such as the Lunar New Year holiday would also have affected the progress of construction, but added that lower supply would help to boost home prices in the short term.

Chief Executive Carrie Lam Cheng Yuet-ngor proposed the vacancy tax last year as part of attempts to curb runaway property prices by forcing developers to add more housing to the city's supply.

Some developers had held on to finished units for more than a decade as they waited for the right moment to cash in.

Under the proposal, completed homes left unsold for more than six months after receiving an occupation permit would be liable to a levy of 5 per cent of the property value.

The tax is already being discussed by lawmakers in the Legislative Council and could come into effect as early as this year.

Developers have called for the government to exclude luxury homes from the tax, arguing that buyers of such properties take longer make decisions than those purchasing smaller units.

〈Asian Post, April 26, 2019〉The transport and Housing Bureau predicted new home supply to be 93,000 units for the next four years, or 20,000 units each year, with a business insider saying the supply will be enough to meet market demand.

Property consultancy Knight Frank said most of the supply will be in the New Territories with more than 50,000 flats, representing 55 percent of the total. Kowloon and Hong Kong Island will provide about 40,000 and 4,600 flats, or 41 percent and 5 percent respectively.

Tseung Kwan O will account for the biggest supply in the New Territories, with 12,500 units over the next four years -13 percent of the total.

Lohas Park will hog the spotlight since a number of phases will be launched, including Lohas Park phases seven and 10.

Meanwhile, Yuen Long will see 10,400 new units in the next four years, or 11 percent of the total.

Tuen Mun will contribute 8,000 flats.In Kowloon, Kai Tak will accommodate 12,300 new units, or about 12 percent of the total - second most after Tseung Kwan O - as the government has frequently put sites up for sale in recent years.

Cheung Sha Wan will provide 7,900 flats, or 8 percent of the total.Knight Frank executive director Thomas Lam said the New Territories will continue to be the main private home supplier in the future, with more than 40 percent of the new supply being small units measuring less than 200 sellable square feet.

〈HK Gov, April 25, 2019〉A spokesman for the Housing Department (HD) today (April 25) reminded residents of public rental housing (PRH) estates to declare truthfully their income and assets.

A PRH resident living at Tin Heng Estate in Tin Shui Wai declared on a 2018 Income and Asset Declaration Form to have no domestic property ownership in Hong Kong and that the total household net asset value did not exceed 100 times the prevailing PRH Income Limit (the asset limit for that household was $2.4 million). Subsequent investigation revealed that the resident owned four domestic properties in Hong Kong at the time of declaration and the estimated market value was about $11.26 million.

The defendant was prosecuted by the HD for making a false statement knowingly, contrary to Section 26(1)(a) of the Housing Ordinance. The defendant was previously convicted by the presiding magistrate in Tuen Mun Magistrates' Courts, who considered a fine punishment could not reflect the gravity of the offence. After making reference to the probation report, the defendant was sentenced ­160­ hours' community service order today.

〈Asian Post, April 25, 2019〉Lohas Park has drawn 11 bids for the latest phase of its housing development as builders vie for the land parcel near the sole shopping centre in Hong Kong's largest residential community.

The plot can accommodate up to 1,850 homes on 950,000 sq ft of gross floor area. That translates into more than one-fifth of the 8,800 private flats expected to be built on the 15 private residential sites to be sold by the government in the coming planning period.

The bidders include CK Asset Holdings, Henderson Land Development, Wheelock, New World Development, Kerry Properties and China Overseas Land & Investment, according to the Ming Pao newspaper.

The MTR Corporation, the operator of the city's railway system and the main developer of Lohas Park, drew the most bids in this latest phase since the first portion of the Tseung Kwan O project was opened for tender in 2005.

The strong response underscores the recovery in Hong Kong's residential property market following a five-month correction starting from August last year.

Prices of both new and lived-in homes resumed their upwards move in the city as a dovish monetary policy by the US Federal Reserve eased concerns of rising mortgage rates, while an expected end to the US-China trade war improved confidence.

"The property market has recovered from the downturn in the last [few] months of 2018, and now the sentiment is strong," said Charles Chan Chiu-kwok, managing director of Savills Valuation and Professional Services.

〈Asian Post, April 23, 2019〉Several Hong Kong investors are among an international group of more than 100 seeking redress from a UK property developer they say has fallen behind in quarterly payments on guaranteed returns on property investments.

According to several of the investors, developer and manager A1 Alpha Properties (Leicester) stopped paying them rental returns after mid 2018 on their investments in student quarters and holiday homes in Britain.

They said they were entitled to receive guaranteed and fixed returns of about 10 per cent for 10 years.

A1 Alpha was placed into insolvency in February at the request of investors. According to business advisory firm Quantuma, appointed to handle the insolvency, the case involves 2,160 units and 1,377 investors across 20 projects in the country.

According to seven investors contacted by the Post, the student quarters projects included College Street Village in Leicester and Scholar's Court in Bradford, while there were also six holiday home projects, including ones at Westbeach in Devon and Green Park in Ilfracombe.

The properties, which cost about HK$510,000 each on average, were marketed by UK-based agency Emerging Property and developed and managed by companies related to A1 Alpha.

Sales literature seen by the Post referred to a number of projects, including College Street Village and Scholar's Court as offering "fixed returns of 8 to 10 per cent for 10 years".

Brian Hodgson, a 55-year-old auctioneer in Hong Kong, was one of the investors affected. He bought one unit in College Street Village and another at Scholar's Court after being attracted by the high "guaranteed" returns stated in emails sent to him.