HK - Housing 01 (May 08 - Aug 11)

[millionairemind]

Published May 5, 2010

HK unveils more rules on property sales

Measures are to ensure transparency and fair play: land authority

(HONG KONG) Hong Kong's Urban Renewal Authority announced new rules to increase transparency in the city's property industry, two weeks after the government said it may raise sales taxes on some homes and accelerate land auctions to prevent a bubble in the market.
Heading north: Home prices in Hong Kong have risen 7.6 per cent this year after a 29 per cent gain in 2009

The authority's new measures include a restriction on corporate purchases of flats to 10 per cent of total sales and a maximum limit of two units per buyer during the sale period, according to the statement on the authority's Web site issued on Monday.

'The measures won't have any impact on prices or sales; they are to protect consumers so they won't complain that information has been withheld when they are buying,' said Wong Leung-sing, an associate director of research at Centaline Property Agency Ltd. 'The only thing that will lower prices is if mortgage rates rise.'

Home prices in Hong Kong have risen 7.6 per cent this year after a 29 per cent gain in 2009, fuelling concerns that housing is no longer affordable amid a bubble.

Apart from raising taxes and pledging to supply more land, the government is also scrutinising developers' sales tactics by clamping down on marketing practices it criticised as deceptive.

To enhance fair play, the URA's joint-venture developer can't conduct internal sales, said the agency, which is charged with redeveloping dilapidated city areas with builders. Staff employed by property agents or subagents who are marketing the projects are also banned from buying homes in the same development through the entire sale period, the authority said.

These are among the eight measures announced by the authority to ensure 'disclosure and transparency of transacted sales', URA chairman Barry Cheung said in the statement.

The new moves come after Financial Secretary John Tsang said Hong Kong may raise the stamp duty on homes sold for less than HK$20 million (S$3.5 million). 'The government is deeply concerned about the rising trend of property prices,' Mr Tsang told lawmakers on April 21.

The government on April 12 announced measures that prevent developers from enticing buyers with inaccurate models of apartments as well as disclosing properties sold to their own executives.

Yet new government figures showed that Hong Kong's home sales jumped 69 per cent in April to the highest since September.

Residential building sales increased to HK$53.3 billion last month from a year earlier, the Land Registry said.

The number of homes sold rose 24 per cent to 12,236. Of these, 944 were residences that cost more than HK$10 million, more than double the figure in April 2009. - Bloomberg

[winston]

Rich Chinese Businessmen Want Hong Kong Homes

Wealthy from stimulus money pumped into the Chinese economy, they are driving up residential real estate, in a slump since the 1997 post-takeover crash

By Bruce Einhorn


Until recently, Hong Kong property agent Clarence Chow didn't pay much attention to would-be buyers from mainland China. In 2008 they represented just 3 percent of revenue for Chow and his team of 58 agents at Centaline Property Agency.

Today Chow hardly thinks of anyone but mainland clients. The nearly $2 trillion in stimulus spending and bank loans pumped into the Chinese economy to fight the downturn has made a lot of business owners rich. These millionaires are flocking to Hong Kong and now account for over 20 percent of sales for Chow's team.

His agents are searching for more mainland customers by scouring government documents for people who bought BMWs, Mercedes, Lamborghinis, and other deluxe models. "If they can buy those cars in China," says Chow, "they can invest in Hong Kong."

Chinese buyers are helping drive a rebound for Hong Kong's residential property market, which has yet to recover fully from the crash that followed the former British colony's return to Beijing rule in 1997. Last year the Centaline property index jumped 29 percent and is now at its highest level in a dozen years. Earlier this year a home on the Peak, the most prestigious neighborhood in town, sold for $7,775 per square foot, a record.

People who follow Hong Kong real estate estimate mainland Chinese make up about 35 percent of the luxury market and 15 percent of the mass residential market. Some are buying to avoid taxes: The Chinese and Hong Kong tax agencies are separate entities, and Hong Kong taxes are far lower. Other Chinese sense an opportunity to make a killing.

A growing number want immigrant status, which earns them a much coveted Hong Kong passport. They get such status by investing a minimum of $840,000 in property. "People are coming here for themselves or their kids," says Nicholas Kwan, head of research in Hong Kong for Standard Chartered Bank. That price "is not that big an amount for many of the wealthy in China."

Hong Kong developers increasingly cater to Chinese fondness for chandeliers, marble, and other wealthy touches. Unlike local buyers, Chinese don't expect to find luxury homes solely in prestige neighborhoods. Mainlanders also pay top dollar in less upscale districts like West Kowloon and even in middle-class suburbs in the New Territories. "Mainlanders don't know much about Hong Kong," says Joseph Tsang, local head of capital markets for Jones Lang LaSalle.

The only thing that could spoil things is the long arm of China's central government, which is trying to cool its economy and deflate property prices in mainland cities. Beijing's campaign could spill over into Hong Kong. "If we have tighter liquidity, there will be less demand coming through," says Eva Lee, an analyst with Macquarie Securities in Hong Kong.

For now, Centaline's Chow says sales are up 15 percent this year. One Chinese buyer walked in, introduced himself, and said money was no object. Chow's agent showed him various properties, each pricier than the last, until he bought two houses for a combined $74 million. Best of all? "He's still buying," says Chow.

http://www.businessweek.com/magazine/co ... 117912.htm

[winston]

No time to read the useless stuff during weekdays

==========================================

Tycoon Lee Shau-kee’s Son Buys Hong Kong Site for $233 Million
May 18, 2010, 12:02 PM EDT

May 19 (Bloomberg) -- Martin Lee, the youngest son of Hong Kong real estate tycoon Lee Shau-kee, paid HK$1.82 billion ($233 million) for a site in the city’s most expensive residential area, signaling luxury home demand is withstanding government measures to avert a bubble.

Lee, who is vice chairman of Henderson Land Development Co., controlled by his father, offered a record HK$68,200 ($8,746) per square foot for the site at the Peak yesterday and said he will develop it for personal use. Auctioneer Joseph Tsang, head of sales at property broker Jones Lang LaSalle Inc., said the per-square-foot price for the 53,350 square foot (4,956 square meters) site was the highest ever at a Hong Kong public auction.

The price for 35 Barker Road beat analyst estimates that ranged from HK$1.2 billion to HK$1.3 billion, indicating demand for high-end sites is holding up even as Hong Kong introduces measures including raising stamp duties on luxury home deals to curb prices, and a government auction on May 11 fetched less than surveyors’ estimates. The Hang Seng Property Index, which tracks the city’s seven biggest developers, reversed a loss to close 0.8 percent higher after the auction.

“This is surprisingly positive, especially after the Tung Chung auction,” David Ng, a Hong Kong-based analyst at Royal Bank of Scotland Group Plc, said in a phone interview yesterday. “There is a bipolarization of the market -- the expensive homes are getting more expensive, while the cheaper ones are getting cheaper.”

An index of existing home prices in Hong Kong fell 1.02 percent as of May 9, the most in nine weeks, as sentiment was weakened by the measures to cool the property market and concerns that Europe’s debt crisis could stall a global economic recovery, Centaline Property Agency Ltd. said May 14.

The government has pledged to increase land supply, imposed limits on corporate purchases of flats and said it may extend increases in stamp duties.

‘Super Luxury Market’

“This shows that the outlook of the luxury market is still positive,” Jones Lang’s Tsang told reporters after the auction. “The super-luxury market isn’t affected by sentiment in the mass segment.” Luxury homes in Hong Kong refer to those costing more than HK$10 million each or bigger than 1,000 square feet.

On the Barker Road site is a five-story apartment building completed in 1981 comprising eight homes spanning about 3,300 square feet each, according to Jones Lang LaSalle. A developer can build only up to 26,675 square feet on the plot due to zoning plans, it said. It didn’t identify the seller.

All the leases on the Barker Road property will end Dec. 31, said Tsang, also international director at Jones Lang.

Lee, who was born in 1971 and is married with two daughters, said after the auction that he will develop the site for family use into villa-style housing.

Rare Site

Such a site on the Peak is very rare, has good views and is very hard to get, said Lee. Known also as Lee Ka Shing, he is also executive director of Henderson Land.

The price for the site per square foot exceeded the sellers’ expectations, Jones Lang’s Tsang said. He estimated that if the site was redeveloped and sold, it could fetch in excess of HK$100,000 per square foot.

Stamp duty on the Barker Road sale could cost HK$77.35 million. The Hong Kong government raised stamp duties on homes selling for more than HK$20 million to 4.25 percent from 3.75 percent in the fiscal year that began April 1.

Government Auction

The Barker Road auction contrasts with the government’s May 11 sale of a site in Tung Chung on Lantau island. The land, which could yield a maximum of 131,000 square meters (1.41 million square feet) of residences, was sold to Nan Fung Development Ltd., a privately held developer controlled by billionaire Chen Din Hwa, for HK$3.42 billion, against a median HK$4.75 billion median estimate of three surveyors.

Yesterday’s auction could serve as an indicator for a government sale of another site on the Peak on July 28, analysts including Ng said. The 2.33-hectare site (250,930 square feet) at 103 Mount Nicholson Road could be sold for HK$7 billion, Savills Plc said yesterday.

Henderson Land will study taking part in the next three government auctions, Martin Lee said yesterday. The government, which owns most land for development in Hong Kong, will hold auctions on May 24, June 8 and July 28, according to the Lands Department.

Still, Jones Lang’s Tsang said on a per-square-foot basis, Mount Nicholson is unlikely to exceed Barker Road’s price as that means the winning bidder would have to build many apartments to make a profit.

Lee Shau-kee, 82, was ranked by Forbes Magazine in March as Hong Kong’s second-richest man behind Li Ka-shing, with an estimated $18.5 billion in wealth.

http://www.businessweek.com/news/2010-0 ... llion.html

[kennynah]

For now, Centaline's Chow says sales are up 15 percent this year. One Chinese buyer walked in, introduced himself, and said money was no object. Chow's agent showed him various properties, each pricier than the last, until he bought two houses for a combined $74 million. Best of all? "He's still buying," says Chow.

i wonder what the agent fee amounts to? 1%?

[peter]

I wonder when would the rich chinese businessmen also want a home in Spore

[winston]

Ha Ha ... what else is new ? Didnt they have the same problem with a development in Shanghai too ?

Hong Kong to probe why record flat sale fell though

HONG KONG — Hong Kong officials said Wednesday they will look into the controversial sale of a luxury flat that fell through months after its developer said it had snatched world-record price.

Property giant Henderson Land Development revealed on Tuesday that sales of as many as 20 out of the 24 units at "39 Conduit Road", its residential project in the Mid-Levels district, had been cancelled.

The scrapped deals included what was supposed to be the world's most expensive apartment, a 6,158-square-foot duplex that Henderson said in October was sold for 56.6 million US dollars.

Critics demanded a probe into the collapse and asked why the cancellations only came to light eight months after the announcement of the sales, which helped hike prices of the city's luxury residential flats and stoked concerns about a property bubble.

A government spokesman said Wednesday it would look into the matter "to consider the next step".

"Clear market information and transparent sales arrangements and transaction records are important to flat buyers," it said.

"The government is determined to create a fairer and a more transparent environment for flat purchasers."

Tycoon Lee Shau-kee, chairman of Henderson, told reporters he was not bothered by the scrapped deals, which amounted to 734 million Hong Kong dollars (94 million US).

"I may be able to sell them for more," the South China Morning Post quoted him as saying. Lee also stressed that he could not cut the prices of the flats.

Henderson has also been condemned for being unscrupulous and misleading by selectively numbering the floors on the 46-storey building as a ploy to attract Chinese buyers.

The supposed 68th floor duplex that snatched world-record price was actually on the 43rd and 44th floors, according to reports. But it was so numbered because "68" sounds like "continuing fortune" in Chinese and is considered lucky.

"The government should do much more to rein in the developers and stop them from deploying questionable tactics to boost sales," said Albert Ho, chairman of Democratic Party.

[millionairemind]

Published June 19, 2010

Mega sales flop of HK luxurious apartments under probe

(Hong Kong)

THE Hong Kong government said it is looking into the cancelled sales of Henderson Land apartments, which have pushed down the developer's shares this week.

Earlier this week, Henderson announced that it would record a loss of HK$734 million (S$130 million) from the cancellation of sales of 20 luxury flats in Hong Kong, which would be reflected in its first-half results. The cancellations included a duplex unit that had fetched a global record price of HK$71,280 per square foot last October.

'Any fraud or deception in property sales is totally unacceptable,' the government said in a statement issued late on Thursday.

The government said it was concerned after only four out of 24 previously announced sales were completed, and it would not tolerate any 'forged non-bona fide transactions'.

Regulatory and law enforcement agencies were looking into and following up on the case, the government said, without elaborating.

Henderson Land said it would cooperate with the probe. 'We welcome the action and will provide all necessary information because we believe this will help us clarify to the public,' said Henderson Land spokeswoman Bonnie Ngan.

On Thursday, Henderson Land vice- chairman Peter KK Lee, son of billionaire Lee Shau Kee, told Reuters that he expected no more sale cancellations here in the near term.

The cancellations led some research houses, such as DBS, Goldman Sachs and JPMorgan, to either downgrade the stock or lower their price targets. -- Reuters

[LenaHuat]

As a result of the investigation, :-
HK-restricts-buyers-to-one-flat-under-new-policy

I'm confused by this report. Firstly, does the restriction apply across the board to all properties or just this development. Secondly, I can't verify this report to other sources

[millionairemind]

Published July 13, 2010

HK should regulate sales of apartments: lawmaker

More transparency on developers' sales tactics needed

(HONG KONG) The government should regulate Hong Kong developers' sales tactics to increase transparency, a lawmaker said yesterday, as the territory's Parliament held a special session on the collapse of HK$2.67 billion (S$474.89 million) of apartment sales by Henderson Land Development Co.

The Parliament held the meeting, which Henderson declined to attend, to discuss the 20 luxury apartment sales that fell through, prompting legislators' calls for the government to investigate the transactions.

The government increased its scrutiny of developers after Henderson said in October that it sold an apartment at 39 Conduit Road in the Mid-Levels district on Hong Kong Island for a record HK$88,000 a square foot.

'What's happening is a failure of existing regulations,' Wong Kwok-hing, chairman of the Legislative Council's Housing Committee, said at the meeting to discuss the collapsed sales.

Henderson said in a press release its appearance in yesterday's meeting would be 'inappropriate' because it has 'sufficiently disclosed' details on the transactions and an investigation is still under way.

The government, which is trying to curb a 38 per cent surge in home prices since the beginning of 2009, introduced in June nine rules on new home sales, including the use of show flats developers use to entice buyers before a building is completed. Those measures have no statutory power and are rules the Real Estate Developers Association 'advise' its members to follow, Mr Wong said.

Hong Kong's government has sought details from Henderson, controlled by billionaire Lee Shau-kee, on the sale agreements after 20 of the 24 sales at 39 Conduit Road were cancelled.

Henderson has repeatedly denied any wrongdoing in the way it handled the transactions. Yesterday it said in a statement published in the South China Morning Post that 'the company strongly rejects' allegations that there have been irregularities in the sale of the apartments.

The government has submitted all the letters exchanged between Henderson and the Lands Department to the Legislative Council (Legco), Permanent Secretary for Transport and Housing Duncan Pescod told lawmakers yesterday. He and other government officials attending the meeting declined to comment on the investigations into the collapsed sales.

Hong Kong police and other law enforcement agencies are investigating the sales at 39 Conduit Road, Transport and Housing Secretary Eva Cheng told lawmakers during a July 5 Legco session. Ms Cheng declined to specify the other agencies and give a schedule for the investigation.

The lawmakers will meet again to discuss the sales, Mr Wong said, without giving a date. The meeting was attended by officials from the government's Lands Department and Housing Authority.

'Setting up legislations to regulate apartment sales would be unnecessary,' said Patrick Chow, head of research at property agency Ricacorp Ltd in Hong Kong. 'All we need is more clearly defined rules.'

Henderson shares rose 0.6 per cent to HK$47.50 at the close of trading in Hong Kong. -- Bloomberg

[winston]

TOL:-

Wonder whether those multi-million dollar homes in Repulse Bay would be affected by the oil-slick ?