No. of view: 3509
Property News Weekly Digest
2019/5/4
〈China Daily, May 4, 2019〉Seven developers submit bids for slice of old runway valued at HK$11.5b, while number of homes sold last month leaps 52pc compared with March

Developers submitted seven bids for the third-largest residential plot at the former Kai Tak airport, as April sales data showed home transactions jumping 52.8 per cent from March in a clear sign of the bull market's return to the world's most expensive city.

Kai Tak's Area 4C Site 2, a sliver of land on the old runway, can yield 641,168 sq ft of gross floor area. It is valued at HK$11.5 billion, or HK$18,000 per square foot, well above the record set in May last year when Sun Hung Kai Properties paid HK$25.16 billion, or HK$17,776 per square foot, for a mixed-purpose lot.

"The recent increase in home price has been amazingly fast," said Vincent Cheung, managing director of Vincorn Consulting and Appraisal.

"Developers are keen to seize land at prime locations [such as Kai Tak] so it wouldn't be a surprise at all if a new benchmark were to be set."

Developers in the land-scarce city buy plots from either the government or the MTR Corporation, and their bids are often a weather vane for the market's direction.

Kai Tak, offering a full view of Victoria Harbour, is the epicentre of the race for land, and developers often outbid each other by as much as 50 per cent to get their hands on harbourfront land to add to their order books.

〈Asian Post, May 3, 2019〉Hong Kong's economy is forecast to slow this year as the city grapples with trade tensions and weaker property values, Financial Secretary Paul Chan Mo-po said in his latest budget unveiled in February.

Recent data have been mixed: March exports and imports fell less than expected while the trade deficit of HK$59.2 billion was wider than forecast; February's retail sales figures miss was blamed on distortions due to the timing of the Lunar New Year holiday.

Property prices are recovering after a 10 percent slide from August through January, with the Centaline Property Centa-City Leading Index rallying 7.8 percent on an 11-week streak since February.

"Despite the recovery in the stock and property markets, consumer spending has been cautious given global headwinds," said Tommy Wu at Oxford Economics in Hong Kong.

Brock Silvers, the managing director of China Multi-Asset Advisory and Fundraising at Kaiyuan Capital said: "China's economy now seems to have stabilized and a trade deal may be closer, but Hong Kong's optimism may be short-lived."

He explained that China's massive credit stimulus is having an immediate impact, but may leave China vulnerable to a downturn later this year. And any trade deal seems likely to continue some significant level of tariffs, meaning trade frictions are unlikely to be quickly or completely resolved, which could cause real concern for Hong Kong's economy later this year or early next.

〈The Standard, May 3, 2019〉The Hong Kong Interbank Offered Rate based mortgage rate could fall after the United States Federal Reserve held interest rates steady and signaled little appetite to adjust them any time soon, analysts said.

As widely predicted, the US central bank kept its interest rate target at a range between 2.25 percent and 2.5 percent.

A Hong Kong Monetary Authority spokesman said there were uncertainties in the US monetary policy and the Hibor would continue to be affected by US dollar interest rates and other factors such as changes in the market supply of and demand for Hong Kong dollar funding.

The Hong Kong and Shanghai Banking Corporation and BOC Hong Kong (2388) said they would keep their best lending rates unchanged at 5.125 percent.

In the primary property market, Wheelock Properties' Montara in Lohas Park has received over 14,000 bids, oversubscribed by 27 times for the first batch of units.

Billion Development's the Horizon II in Tai Po project, meanwhile, has received 700 applications for the second price list of 366 apartments.

Apartments in first two price lists were 14.5 times oversubscribed, receiving over 5,700 bids - and will launch tomorrow.

〈Asian Post, May 2, 2019〉The Hong Kong Interbank Offered Rate based mortgage rate could fall after the United States Federal Reserve held interest rates steady and signaled little appetite to adjust them any time soon, analysts said.

As widely predicted, the US central bank kept its interest rate target at a range between 2.25 percent and 2.5 percent.

A Hong Kong Monetary Authority spokesman said there were uncertainties in the US monetary policy and the Hibor would continue to be affected by US dollar interest rates and other factors such as changes in the market supply of and demand for Hong Kong dollar funding.

The Hong Kong and Shanghai Banking Corporation and BOC Hong Kong (2388) said they would keep their best lending rates unchanged at 5.125 percent.

In the primary property market, Wheelock Properties' Montara in Lohas Park has received over 14,000 bids, oversubscribed by 27 times for the first batch of units.

Billion Development's the Horizon II in Tai Po project, meanwhile, has received 700 applications for the second price list of 366 apartments.

Apartments in first two price lists were 14.5 times oversubscribed, receiving over 5,700 bids - and will launch tomorrow.

〈China Daily, May 2, 2019〉The report, entitled “Squeezed Middle Class”, is having a profound impact on the social and economic landscapes in many developed economies. The challenge it poses to governance in Hong Kong has been made all too clear by the growing mistrust of the establishment, fanned by political and social activists in the opposition.

As in other developed economies, the problem stemmed mainly from the huge imbalance in income distribution. The rich minority is getting an increasingly larger share of the economic gains, while the average income of the middle class has remained static for decades.

In Hong Kong’s case, the issue is further complicated by the surge in property prices, making it more difficult for many people to cross over to the middle class. The government is committing great efforts and resources to creating more land to increase the supply of public, as well as private, housing.

It would take many years before these efforts can start to bear fruit. Meanwhile, the public’s patience is fast running out.

To be sure, home prices in other developed economies have also been growing more than 30 percent faster than median household income in recent decades, the OECD report says, adding that the middle class spent 32 percent of their budgets on housing in 2015, compared to 25 percent in 1985.

The housing situation is much worse in Hong Kong. Various studies show that many families, who have bought their homes in recent years, are paying up to 80 percent of their household incomes on mortgage repayments. The proliferation of lenders, who are among the biggest spenders on TV and other advertisements, is widely taken as an indication that more middle-class households are spending more than they earn.