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Property News Weekly Digest
2022/1/15
〈Business Post, Jan 15, 2022〉The private residential market is likely to start the year on a hushed note as developers wait until after Chinese New Year (Feb 1 and 2) to market their properties, analysts say. This seasonal lull also gives developers a chance to "wait and see" before making any major decisions in response to the recent round of property cooling measures.

Since the curbs were introduced in mid-December last year, PropNex has observed a 20 to 30 per cent slowing in new home sales on average compared to the weeks prior, said chief executive Ismail Gafoor. According to caveats lodged, developers sold 643 new homes in December 2021 excluding executive condominiums (ECs), down 58.4 per cent from November's 1,547 units.

"However, the slower sales are most likely due to seasonality and the holidays as buyers, sellers, or agents go on their year-end break. In our view, the dip in sales is not entirely a result of the cooling measures," Gafoor said.

Analysts added that they have not seen any major announcements from project developers, such as launch delays or major price cuts. "Cutting project selling price may not draw in the buyers. It could cause buyers to expect even more price cuts in the near future," said Nicholas Mak, ERA Realty's head of research and consultancy.

〈Asian Post, Jan 14, 2022〉Two international brands have confirmed the closures of their Causeway Bay stores on Russell Street, once the world's most expensive retail strip, as the onset of the pandemic shows no sign of abating.

Burberry's flagship shop on Russell Street will close as it nears the expiration of its 10-year lease, and it will not be extending the contract.

The British fashion label, which has held 5,200 square feet of space on two levels at Soundwill Plaza, currently pays HK$2 million per month.

Following Burberry's footsteps, watch brand Royal Oak will close its 900-sq-ft store in the prime location in the first quarter of this year.

According to an estate agent, Burberry's landlord, Soundwill Holdings, was not willing to slash the rent for the new lease.

In 2012, the fashion company paid HK$7.7 million per month, which was 2.5 times the previous tenant's rent. It was increased to HK$8.8 million when the contract was renewed.

The pandemic has taken a huge toll on Hong Kong's retail sector, making it harder to find tenants for large spaces on Russell Street.

〈The Standard, Jan 13, 2022〉Hong Kong's developers continued to buy prime land sites in top-tier cities on the mainland, as they took advantage of the general malaise among competitors struggling to survive an unprecedented debt load in the industry.

Kerry Properties, controlled by the Malaysian billionaire Robert Kuok, paid 13.3 billion yuan (HK$16.3 billion) for four adjacent plots of mixed-use land in Shanghai during the municipal government’s first auction of the year on January 4.

The firm plans to turn the 38,100 square metre site near The Bund into what it calls a new landmark, comprising a hotel, offices, shopping centres, blocks of flats and town houses.

"We anticipate the project will contribute good property sales income and add significant rental income, with capital value creation in line with the growth of mainland China," said Serene Nah, executive director and chief financial officer of Kerry Properties.

This year is likely to be another high-water mark for China’s debt defaults, with US$38.3 billion of offshore bond payments due in the first half. With many of the country’s biggest land buyers – China Evergrande Group, Kaisa Holdings – hamstrung by debt, Hong Kong's developers are picking up choice parcels.

〈Asian Post, Jan 12, 2022〉Buyers are spending huge amounts on multiple flats at new developments despite the additional 15 per cent stamp duty applied to second homes

The trend of buying multiple homes in Hong Kong 's new developments is likely to pick up as the wealthy choose larger spaces for their families amid the pandemic, according to market observers.

In new housing estates from Ontolo in Pak Shek Kok to South Land in Wong Chuk Hang, some buyers have splashed out hundreds of millions of dollars for multiple flats despite the additional 15 per cent stamp duty levied on second homes.

Such developments tend to have better facilities and management than traditional luxury houses, agents said, adding that since such flats tend to be smaller, buyers were likely to acquire more than one flat at the same time.

"Because of the pandemic in the past two years, both self-occupants and investors are paying more attention to the housing estate environment and facilities," said Dave Ma, chief operations officer of Hong Kong Property Services (Agency).

〈The Standard, Jan 11, 2022〉Emigration wave and capital exodus over tighter mainland regulations will spark drop, UBS says

UBS predicts a 5 per cent drop in Hong Kong's lived-in home prices in the coming year, becoming the second investment bank to forecast a decline in the city’s property market after Morgan Stanley.

A mass emigration wave, the slowdown in the mainland’s economic growth, an exit of capital because of Beijing’s tightened regulations and an imminent interest rate rise in the United States would all contribute to the drop, said John Lam, head of the China and Hong Kong property team at UBS Research.

"We hold a prudent view on the prospects for Hong Kong's property market," Lam said at the 22nd annual UBS Greater China Conference in Hong Kong yesterday. "The city’s lived-in home prices will drop by 5 per cent this year."

Hong Kong is suffering an alarming drop in its population as nearly 90,000 citizens left the city in the year to August 2021, according to the latest data from the Census and Statistics Department.