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Property News Weekly Digest
2021/10/30
〈China Daily, Oct 30, 2021〉Revolutionizing HK's landscape, economy

SAR's mega Northern Metropolis plan hailed as a visionary move to ease city's housing woes and speed up integration with Greater Bay Area development. By Zhou Mo in Shenzhen and Zeng Xinlan in Hong Kong

The making of the Northern Metropolis heralds a reshuffling of Hong Kong's landscape and economy in the coming years — an ambitious and timely visionary move to optimize the city's unbalanced economic structure and integrate it into the robust development of the Guangdong-Hong Kong-Macao Greater Bay Area, pundits said.

In the last Policy Address of her administration's current tenure, delivered on Oct 6, Chief Executive Carrie Lam Cheng Yuet-ngor unveiled a blueprint to develop the northern part of Hong Kong into a metropolitan area.

Known as the Northern Metropolis Development Strategy, the mega project aims to ease Hong Kong's long-standing housing and land-shortage problems and promote economic integration with its neighbor Shenzhen and other member cities of the Greater Bay Area.

〈Asian Post, Oct 29, 2021〉China Evergrande Group has staved off a potential default for the second time in a week after paying an overdue offshore bond coupon before a 30-day grace period ran out.

The Shenzhen-based developer paid US$45.2 million of coupon due on its 9.5 per cent, US$951 million bond that matures on March 29, 2024, according to people familiar with the matter.

The firm missed the payment on September 29 and was given 30 days to comply before bondholders are entitled to declare it in default, a move that could trigger cross-defaults across all its offshore debt and, in the worst case, set the stage for creditors to petition for its liquidation.

Evergrande's spokesmen did not respond to requests for comment.

It is the second time the firm has sailed close to the wind with investors and creditors. A week earlier, it wired US$83.5 million in overdue coupon payment to its trustee on the final working day before running out of a 30-day grace period.

Separately, Evergrande's wealth management unit paid the first 10 per cent of a redeemed financial product before its October 30 deadline, according to investors.

〈Asian Post, Oct 28, 2021〉To this day, Ms Lee still rues the HK$1 million she invested in a new residential property in Britain in 2014.

An overseas property novice at the time, Lee, who manages a consultancy and declined to give her full name, said she fell victim to the unprofessional tactics of an agent in Hong Kong while negotiating the purchase of the 300 sq ft home in Leeds.

She said the agent claimed the £80,000 (HK$855,540) investment would pay for itself in just three years if it was rented out to students - a carefree proposition, they maintained, given a management agency would handle everything for her.

The agent, however, failed to warn her that properties' management agencies changed often and easily, and their appointment was beyond investors' control.

The firm taking care of Lee's property was subsequently replaced three times over the years, resulting in higher fees and more expenses when it came to making repairs.

〈China Daily, Oct 27, 2021〉Based on experience in Shanghai and Chongqing, levy designed to rein in runaway home values 'unlikely to derail the long-term price trend'

Shanghai and Chongqing, two of the mainland's biggest urban centres, offer a hint of what a property tax would look like as the National People's Congress (NPC) gave its nod last week to kick off the tariff after a decade of stop-go measures to rein in runaway home prices.

The two municipalities, with a combined population of almost 60 million, were the test beds in 2011 for a tax that still remains, although its nationwide roll-out was deferred two years later when Xi Jinping took over as president, along with a new line-up of ministers and regulators.

The tax, enforced by the municipal authorities of Shanghai and Chongqing, leaned heavily against non-residents and owners of more than one home, especially large, expensive property.

A resident who opts for a second new home exceeding 60 square metres would be liable to an annual levy of between 0.4 per cent and 0.6 per cent of the property's fair value, calculated on the area that exceeds the minimum. Non-residents - defined by the country's household registration system, or hukou - buying their first homes will be charged a 0.6 per cent tax rate if the purchase price is double the city's average price in the preceding year.

〈China Daily, Oct 26, 2021〉Hong Kong's lived-in home prices declined by the most in nearly a year in September, after touching a record high in July, as buying power was hit because of a retreating stock market, according to property consultants.

Prices slipped by 0.4 per cent to 396.3 last month, according to an index published yesterday by the Rating and Valuation Department.

It was the steepest fall since October 2020 when the index retreated by 0.5 per cent, according to property consultancy Knight Frank. It was also the second consecutive monthly decline since the gauge touched a record high of 397.7 in July.

"Property prices have softened slightly after peaking in July," said Derek Chan, head of research at Ricacorp Properties.

"Homebuyers have stayed on the sidelines after media reports said Beijing officials told a number of Hong Kong property tycoons in a closed-door meeting to throw their resources and influence behind the central government's efforts to ease the city's housing problems."