HK - Housing 01 (May 08 - Aug 11)

Re: HK - Real Estate

Postby LenaHuat » Thu Jul 29, 2010 3:33 pm

HONG KONG : A residential site in one of Hong Kong's most desired luxury areas on Victoria Peak was sold for US$1.33 billion in a closely-watched land auction on Wednesday. The price was within market expectations, but failed to hit the top end of forecasts, suggesting the government's measures to cool the market may be having an effect.

There was keen interest in the auction, with Hong Kong's biggest developers battling it out on the floor.
Under the hammer was the site which housed the former government headquarters and boasts panoramic views of Victoria Harbour.

The 2.3 hectare site can provide a total gross floor area of nearly 325,000 square feet.

Unlisted developer Nan Fung Group snagged the winning bid at HK$10.4 billion, or US$1.33 billion.

Nan Fung said it will jointly develop the luxury residential site with blue-chip developer Wharf Holdings.

The selling price of the developed property is expected to hit US$4,900 per square foot.
Analysts said Wednesday's auction result sets the bar for where luxury property prices are headed. But the winning bid fell short of the top end of market expectations of around US$1.46 billion.


Nan Fung is like FEO, an unlisted developer with deep pockets. Nan Fung is partnering CityDevLtd to develop the SouthBeach project.
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Re: HK - Real Estate

Postby kennynah » Thu Jul 29, 2010 3:53 pm

Good luck Nan Fung Group !!!
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Re: HK - Real Estate

Postby winston » Fri Jul 30, 2010 8:34 am

Property market so hot yet there's negative equity ? :roll:


Homebuyers warned as negative equity grows by Serinah Ho
Friday, July 30, 2010

The number of residential mortgages in negative equity rose slightly in the second quarter this year.

The figures from the Hong Kong Monetary Authority came as a leading real-estate agency warned home buyers against rash purchases.

The end of June saw 310 cases where the mortgage value exceeded that of the property, the authority said, compared with 303 cases when the first quarter ended in March.

The aggregate value of the properties also rose slightly to HK$500 million by end-June, compared with HK$400 million by end-March. The unsecured portion of these loans is around HK$100 million.

A top manager at Centaline Property warned would-be buyers to consider their financial capacity when purchasing flats amid the current low interest rates.

Associate director of research Wong Leung-sing also said homebuyers should factor in an increase in interest rates.

"Buyers should think carefully before any purchase, leaving room for an increase in interest rates that could add a drastic burden on home owners, " Wong said.

Hong Kong is forced to maintain low interest rates under the linked exchange rate system with the United States, which has created an economic imbalance in the city and pushed up asset values, he noted.

"Under US influence, Hong Kong's assets values keep on rising, but this could mean a drastic fall when the US later raises its rate level," he said.

An higher interest rate means buyers will suffer. "I suggest that those considering properties worth HK$4 million rethink and buy flats worth HK$3 million instead," Wong said. "Also, try to borrow less from banks to lessen the tragedies brought by a drastic increase in rates."

Financial Secretary John Tsang Chun-wah said in early June that the public mortgage burden could immediately increase from the current 40 percent to 55 percent.

"This should also be a crucial reminder to property buyers in Hong Kong," Wong said.

The public mortgage burden has been 35 percent of household income since 2005, which Wong regards as "a healthy proportion" compared with the 112 percent in 1997.

The territory has a current supply of 2.5 million home units for 2.3 million families, so people "shouldn't be afraid of short supply."

After the government said last week it will construct more household units, Wong expects an annual supply of up to 15,000 homes over the next three to four years.

http://www.thestandard.com.hk/news_deta ... 00730&fc=8
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Re: HK - Real Estate

Postby winston » Sat Aug 14, 2010 12:22 pm

Hong Kong Government to Supply More Land, Target Mortgages to Avert Bubble
By Kelvin Wong and Sophie Leung

Hong Kong will tighten mortgage lending rules and increase the supply of land as the government intensifies a campaign to suppress what Financial Secretary John Tsang called a “rare” gain in home prices.

Down payments for apartments costing HK$12 million ($1.54 million) or more will rise to 40 percent, from 30 percent, with immediate effect, Hong Kong Monetary Authority Chief Executive Norman Chan said yesterday. The government will increase land sales next year, Tsang said earlier.

The government has been seeking to rein in home prices that have soared about 40 percent since the beginning of 2009, boosted by mortgage rates at the lowest in two decades and buying by mainland Chinese. Tsang said home prices are approaching the level of 1997, the height of a previous bubble that was followed by a six-year slump.

“This is a serious attempt by the government to slow the growth in property prices,” said Nicole Wong, regional head of property research at CLSA Asia Pacific Markets in Hong Kong. “Maybe a lot of people still have HK$4.8 million for a down payment on a HK$12 million flat, but luxury is a leading sector and this is sending a message that this is serious.”

The Hang Seng Property Index of seven of the largest property developers in the city has declined 1.1 percent this year. It closed 0.7 percent lower at the 4 p.m. market close in Hong Kong yesterday.

Home prices will rise a further 10 percent to 15 percent by year-end, Cusson Leung, an analyst at Credit Suisse Group AG forecast before yesterday’s measures.

For properties worth HK$12 million or less, the maximum loan amount will be capped at HK$7.2 million, meaning down payments will increase for any property valued above HK$10.3 million. Luxury homes in the city are defined as those costing at least HK$10 million, or bigger than 1,000 square feet.

Down payments for investment properties will rise to 40 percent from 30 percent, Chan said.

Stress Tests

Hong Kong banks will be asked to apply stress tests on mortgage rates rising 2 percentage points, HKMA’s Chan said. Mortgage borrowers’ debt-to-income ratio should not be higher than 60 percent when the interest rate increases by 200 basis points, Chan said.

The value of outstanding mortgage loans rose to HK$679.5 billion as of June 30 from HK$587.6 billion at the end of 2008, according to data compiled by Bloomberg.

“We want to remind all potential homebuyers that the interest rate right now is at a very abnormal level and it is impossible for this to be sustained,” Chan said.

Since the early 1990s, Hong Kong banks have been restricted from lending more than 70 percent of the purchase price of a home, to reduce the risk of loan losses from a market crash. To help the market recover from the 1998 crash, buyers were subsequently allowed to borrow a further 15 percent of their home’s value as long as they obtained mortgage insurance, a move that increased affordability while limiting risk for banks.

New Approvals

The market has already been cooling, with new mortgage approvals declining to HK$35.4 billion in June, down 6.2 percent from May, according to HKMA data. Some 0.03 percent of mortgage loans were delinquent, while only 310 owners in the city owe more on their homes than their properties are worth.

The average value of new home loans made in June was HK$2.31 million, according to the HKMA.

Hong Kong banks are offering mortgage terms as low as 70 basis points above the one-month Hong Kong interbank offered rate, which is currently at 0.22 percent, according to mortgage broker mReferral Mortgage Brokerage Services.

The government will offer sites for auction next year in the Chai Wan, Hung Hom and Fanling districts, and will work with MTR Corp. and the Urban Renewal Authority to increase land supply, Tsang said. MTR is one of the biggest owners of unoccupied residential sites in Hong Kong. It may also change the purpose of some land to residential, he added.

Government Sales

Most government land sales in recent years have been triggered by developers who promised to pay minimum amounts for sites on a list of available lots under the so-called land application system. Regular government land auctions have been partially resumed this year after they were halted in 2004 to support falling home prices.

“The key to the issue of ever-rising home prices is shortage of supply and that the government has to wait at least a few years from now to see the effect of increasing land supply on the property market,” said Irina Fan, an economist at Hang Seng Bank Ltd. in Hong Kong. “The risk of asset-price bubbles will continue to grow as we expect the low interest rate environment will last for an extended period.”

The government will raise the cancellation fees to 10 percent of deposits from 5 percent, and ban the resale of new flats before transactions are completed, Tsang said. Speculation in the Hong Kong market needs attention and the measures will increase the cost for speculators, he said.

“Flat prices in some popular developments are fast approaching historical highs,” said Tsang. “We are determined to stop speculative activities in the property market.”

Luxury Projects

Sun Hung Kai Properties Ltd., Hong Kong’s biggest developer, said this week it has sold almost 500 units of its luxury Larvotto project in the Island South district since sales began in mid-July. The apartments have been selling for an average of HK$30 million.

Billionaire Lee Shau-kee’s Henderson Land Development Co. said it plans to sell 10 new apartments at its 39 Conduit Road project that are priced at as much as about HK$186 million.

“The property market in the past few months has really been rising a bit too fast and too much, so these measures are understandable,” said James Cheung, director at the surveyor unit of Centaline Property Agency Ltd., one of the city’s biggest real estate agencies. “Regardless, the market will probably cool down a bit in the near term. Whether they’ll have any long term impact depends on how stringent the measures are.”

Hong Kong raised down payments for flats costing more than HK$20 million to 40 percent from 30 percent in October. The same month the Hong Kong Mortgage Corp. limited home loan insurance to homes of no more than HK$12 million and suspended insurance for homes that aren’t owner occupied. The government also has clamped down on marketing practices it criticized as deceptive.

Mortgage Insurance

The Hong Kong Mortgage Corp. said yesterday it will suspend insurance for mortgages higher than 90 percent of the purchase price.

Stamp duty on homes selling for more than HK$20 million was increased to 4.25 percent from 3.75 percent this fiscal year starting April 1.

Hong Kong is following in the footsteps of China, where the government has moved to curb soaring housing prices by raising the minimum down-payments and mortgage rates for buyers of multiple properties, and ordering lenders to halt third-home loans in areas with “excessive price gains.”

Property prices in China’s 70 major cities climbed 10.3 percent in July from a year earlier, the weakest pace in six months, according to the National Bureau of Statistics. They rose at a record pace in April.

http://www.bloomberg.com/news/2010-08-1 ... ubble.html
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Re: HK - Real Estate

Postby winston » Mon Aug 16, 2010 10:51 am

Not vested

DJ MARKET TALK: HK Developers Fall; Sino Land Top Sell - Citi

1027 [Dow Jones] HK developers tumbling with property sub-index down 3.2% vs HSI down 0.3%, as sentiment takes hit from HK government's fresh measures aimed at reining in soaring HK property prices.

Sector leader SHK Properties (0016.HK) last down 4.3% at HK$109.80, high-beta estate agent Midland (1200.HK) off 7.9% at HK$6.75.

Citigroup says residential-focus developers subject to increasing policy risk, suggests investors to switch to cash-rich diversified developers; house's top buys Cheung Kong (0001.HK), Hang Lung Properties (0101.HK), Link REIT (0823.HK), while Sino Land (0083.HK) remains top sell on increasing policy risks. Sino Land worst-performing blue chip, off 5.3% at HK$13.34.

Source: Dow Jones Newswire
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Re: HK - Real Estate

Postby winston » Mon Aug 16, 2010 1:04 pm

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DJ MARKET TALK: New Rules To Dampen HK Property Mkt Sentiment -CS

1212 [Dow Jones] Credit Suisse expects HK government's new sector-curbing measures will dampen local property market sentiment near term, but if interest rate continues to stay low, investors, end-users would be active again, once impact of new measures digested.

Thinks Sun Hung Kai Properties (0016.HK), Sino Land (0083.HK) under most selling pressure, as they have dominated news flow on primary launches over past 2 months; says Cheung Kong (0001.HK), MTR Corp. (0066.HK) less risky.

Notes CK relies more on volumes rather than premium pricing, positive momentum of associate Hutchison Whampoa (0013.HK) which likely to support stock, MTRC remains one of largest land sellers in HK.

MTRC's tendering of Nam Cheong, Taiwai Station in next few months likely to be catalysts for MTRC; says its railway operation perfectly hedged for inflationary trend in HK with its automatic fare adjustment mechanism.

Sun Hung Kai Properties last down 4.0% at HK$110.10, MTRC down 1.1% at HK$27.95.

Source: Dow Jones Newswire
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Re: HK - Real Estate

Postby winston » Mon Aug 16, 2010 3:58 pm

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DJ MARKET TALK: HK Developers Off;Don't Take Measures Lightly-UOB


1517 [Dow Jones] HK developers remain big laggards vs HSI +0.3%, with SHK Properties (0016.HK), New World Development (0017.HK), Sino Land (0083.HK) each down at least 4%, on concerns fresh government measures to rein in soaring property prices will hurt developers' sales.

UOB KayHian expects developers most-exposed to residential sector, Sino Land, SHKP, will be under pressure; also expects profit-taking on Hang Lung Properties (0101.HK), which set 52-week high recently.

House says many doubt effectiveness of these measures in face of persistently low interest rates, ample liquidity, but "we think the market might have undermined the impact of curtailing speculative activities in the primary market and mortgage restriction on the overall residential sector, particularly as the government has promised there will be further controlling measures if necessary."

Source: Dow Jones Newswire
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Re: HK - Real Estate

Postby winston » Fri Aug 20, 2010 9:14 am

On CNBC:-

Mainlanders bought 30% of apartments valued > HK$20m in 1H.

And Mainlanders bought 13% of apartments valued < HK$20m in 1H.

There's now talk of curbing foreigners from buying a HK property.

So what's the path of least resistance ? :lol: :roll:
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Re: HK - Real Estate

Postby kennynah » Fri Aug 20, 2010 12:12 pm

how come mainland chinese are considered "foreigners" to the HK SAR?
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Re: HK - Real Estate

Postby winston » Fri Aug 20, 2010 12:18 pm

I think the discussion is not whether foreigner or not. It's whether you are a resident in that place or not.

Example:-

If a Shanghainese cannot buy property in BJ unless they provide a BJ Income Tax return and vice versa, why should a mainlander be allowed to buy property in HK and drive up the cost of housing for the local residents ?

It's ok if you already have bought a place ( and most politicians already have a place or two, so the policy is always skewed ) but what about the young people who are just starting out ?
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