HK - Housing 01 (May 08 - Aug 11)

[winston]

HK luxury flat sells at less than half its asking price: report

HONG KONG - A house at one of Hong Kong's most prestigious addresses has sold for less than half its asking price as property values continue to plunge amid the financial crisis, a report said on Thursday.

The house, near Hong Kong's famous Victoria Peak, sold for HK$76 million (US$9.74 million), heavily reduced from its original asking price of HK$190 million, Sing Tao Daily reported, citing market sources.

The 3,300-square-foot property was sold to cartoonist Ma Wing-shing, the report said.

The owner bought the property in 2006 for HK$90 million.

The owner agreed to slash the price after the recent crashes in the Hong Kong stock market, which has lost more than 50 per cent in the last year.

The transaction marked the first time a property in the Severn 8 development was sold in the secondary market for less than its original purchase price.

Severn 8, with 22 Italian-style houses, has been dubbed Asia's number 1 luxury development after its per square foot price reached HK$56,200 to become the region's highest priced in June this year, the report said.

Properties on the Peak offer a panoramic view of the city's famous Victoria Harbour and are much sought after.

The city's high-end property market has been dealt a severe blow by the credit crunch, with analysts expecting a 30 per cent drop in prices for luxury flats over the next year as banks tighten their mortgage policies. -- AFP

[kennynah]

time to buy HK properties....at least a few of my friends are considering...

[winston]

Misery month for flat prices
Mandy Lo

Property agencies have tipped home prices to fall 5 percent this month, with total transactions sinking to a 34-month low amid the global financial crisis and tightened mortgage policies.

The gloomy estimate comes on the heels of an earlier UBS forecast that Hong Kong home prices may plunge 30 percent from now to the middle of 2009 because of a threatening recession.

"Home prices tumbled 10 percent last month and we project them to fall 3 percent to 5 percent further in November," said Ricacorp properties head of research Patrick Chau Mun-kit.

He estimated that October transactions would be less than 6,000 and the figure may plunge below 5,000 for November.

Land Registry data shows total transactions slid 21.6 percent to 5,780 as of last Thursday compared to 7,369 for all of September, said Midland Realty chief analyst Buggle Lau Ka-fai.

Hong Kong Property chief executive Fredy Wu Yat-fat forecast home prices to fall another 5 percent by year end while those of luxury flats may tumble between 10 and 15 percent. He expects November's secondary transactions to hover between 4,500 and 5,000, amid banks' cautious mortgage policies.

Meanwhile, heartbroken home sellers are trying to dispose of flats at prices 15 percent lower than for what they paid.

The number of discounted presold flats in Celestial Heights in Ho Man Tin has more than doubled to 120 from 50 early last month, according to Ricacorp associate director Tsang Ning-chi.

A vendor sold five homes in Whampoa Garden for a total of only HK$9 million, 27 percent off the original price tag of HK$12.3 million when the flats were bought from last November to September.

"Property prices may find support this month, having dropped more than 10 percent compared to three months ago," said Centaline Property associate director of research Wong Leung-sing.

He said with more potential buyers viewing flats and prices undergoing adjustment over the past two months, home transactions may rebound to more than 6,000 starting this month if banks are willing to lend.

[winston]

Morgan Stanley cuts targets on SHKP, Hang Lung

Hong Kong developers including Sun Hung Kai Properties (0016) and Hang Lung Properties (0101) saw their share price estimates cut by Morgan Stanley on expectations the city's home costs will drop 30 percent over the next two years.

The investment bank cut its target on Sun Hung Kai to HK$62.45 from HK$80 while maintaining its "underweight'' rating on the stock.

"We don't expect a meaningful residential recovery until 2011,'' Morgan Stanley analysts including Karen Kwan and Angus Chan wrote.

Hang Lung, the city's third-largest lender, had its target price cut to HK$18.2 from HK$13.2 by the analysts, who called the developer their "least-favored stock in the sector.''

BLOOMBERG

[winston]

Morgan Stanley maintained a "cautious" view on local developers and cut price targets by 22-31 pct on major firms.

The brokerage said it expects Hong Kong residential prices to drop 20 pct over the next 12 months and a further 10 pct over the subsequent year.

[millionairemind]

November 7, 2008, 3.16 pm (Singapore time)

HK's financial, property firms forced to cut staff amid crisis

HONG KONG - Financial and property firms in Hong Kong have started laying off staff as they feel the full force of the global financial crisis, newspapers reported on Friday.

US investment bank Goldman Sachs has cut 10 per cent of its team, or about 100 staff, the South China Post quoted a source as saying.

The bank Goldman Sachs would not offer salary cuts as an option to layoffs, a source close to the company told AFP.

The group had in October revealed plans to slash a tenth of its global workforce of 32,500.

Swiss banking giant Credit Suisse has sacked at least 10 equity analysts and sales people last week, according to the Post.

Ricacorp Properties, one of the largest estate agents in the southern Chinese city, said it had cut 400 employees, or about 30 per cent of its workforce, since June. It has also closed 40 of its 120 branches over the same period, although a spokeswoman said many of them were only temporarily.

'Some of the landlords of these offices have offered to lower the rent in view of the difficulties we are facing. We will closely monitor the property market in the next few months to see if there is a chance to re-open some of them,' she said.

Analysts said they also expect to see rounds of massive layoffs in the catering and retailing industries as the new year nears, when companies will be forced to downsize or go bust as they fail to clear debts. -- AFP

[winston]

Hong Kong property prices slashed in global slowdown

HONG KONG (AFP) — The global financial crisis is rapidly stunting Hong Kong's office, luxury and residential property markets after they hit a peak in the early summer.

The window displays at the Hong Kong property agency where Stephen Poon works are bursting with cut prices, last minute reductions and cash incentives.

But buyers were still few and far between, as the stumbling global economy has cut dead the city's five-year booming property market.

"It has been very quiet," said Poon, a property agent for Midland Realty, a large city firm.

"Before September our branch was making two to three million Hong Kong dollars (256,000 to 385,000 US dollars) every month, but now it's only around 50,000," he said, describing a 98 percent drop in revenue.

"I have six kids, three are at university in the UK where fees are high," said Poon, whose commission has inevitably suffered. "It's my mission to make sure I can put them through school, but it is now also my cross to bear."

Signs outside agents have shown discounts of more than a million HK dollars in recent weeks and analysts said they expected prices in every sector to drop by an average of 20-30 percent before next July.

With sellers reluctant to lose value and many potential buyers holding off amid stock market turmoil and tightening lending conditions, many agents in the territory have already lost their jobs.

Nearly 5,000 agents in Hong Kong and China have left the city's biggest property group Centaline since June as the company struggles with plummeting commissions, Centaline's chairman Shih Wing-ching told AFP.

"(Before the slowdown) 10,000 to 12,000 units were being sold in Hong Kong each month, but October saw half that amount," he said.

Anyone buying in the hope that property values will appreciate over the next year is "juggling with knives and razorblades," said Chris Dillon, author of a recently published guide for buyers in the territory.

"Nobody can call bottom in this downturn yet," he said. "Anyone who says they can is bluffing."

The malaise has hit the luxury sector particularly hard.

Plunging values saw a house near Victoria Peak, one of Hong Kong's most prestigious addresses, selling for less than half its asking price of 190 million Hong Kong dollars in recent weeks, local media reported.

"The (overall) market has seen dramatic change in the past month alone," said Simon Lo, director of research at Colliers International, adding that five percent was wiped off the entire market in September.

"This kind of cycle could last for two more years," he said.

The current downturn ends a property boom that began after the SARS crisis in 2003, when Hong Kong's economy slumped due to worries over the deadly disease.

In the following years, the city's financial sector boomed, attracting wealthy overseas bankers and boosting the income of those already here.

They fought over the city's prime addresses, squeezing supply and forcing rents to balloon more than 100 percent.
But uncertainty has since ripped across Asia, hitting every market that has boomed in the past five years.

Prices of private homes in Singapore fell for the first time in four years in the third quarter, government data showed, while China, India and Bangkok markets have all suffered.

The key difference between today and the post-SARS downturn is the fact that the current crisis is global, says Lo, with greater uncertainty as to when the downcycle will shift upwards.

Yet observers say that it is only a matter of time before buyers have the confidence to jump back in, particularly in Hong Kong.

With most mortgages requiring deposits of at least 30 percent in Hong Kong, the market is regarded as more robust than in the stricken United States, analysts say.

"Supply is tightly controlled by the government meaning that Hong Kong values will not plunge as dramatically as those in the United States or Europe," said Centaline's Shih.

Hong Kong buyers are also likely to benefit from low mortgage rates, as the city's currency is pegged to the US dollar. As a result any cut in the Federal Reserve lending rate, likely in the next few months, will be matched.

The author Dillon said the tumble has created a great opportunity for long-term buyers.

"Lots of people here are cashed-up and waiting quietly on the sidelines looking for bargains. I'm one of them," he said.

[winston]

Hong Kong's home prices are expected to fall 15 percent in 2009, while rents may decline 10 percent, Nomura International (HK) said in a research report on Tuesday

[millionairemind]

November 21, 2008, 7.54 pm (Singapore time)

HK's negative equity cases almost triple as property prices fall

HONG KONG - The number of Hong Kong home mortgage loans in negative equity in the third quarter was almost triple that of the previous three months as property prices plunge, officials said on Friday.

The global financial crisis has sent the number of negative equity cases up to 2,568 over the July-September period, compared with 936 cases between April and June, the Hong Kong Monetary Authority said.

The percentage of mortgage borrowers in negative equity increased from 0.2 per cent in the second quarter to 0.5 per cent in the third quarter.

And the aggregate value of residential mortgage loans in negative equity rose to HK$6 billion (US$769 million), from HK$1.7 billion in the previous quarter.

Prices for many apartments have fallen between 10 to 30 per cent in the last two months, as property demand shrinks on the back of job cuts and an economic recession.

The number of negative equity cases hit a historic high of 106,000 in the second quarter of 2003, when Hong Kong's property sector was devastated by the outbreak of Severe Acute Respiratory Syndrome (Sars). -- AFP

[kennynah]

HK properties...going the way to Hong Kong

**********

Hong Kong New Mortgage Loans Decrease In October
11/26/2008 8:04 AM ET

(RTTNews) - Wednesday, a monthly survey of residential mortgage lending from the Hong Kong Monetary Authority showed that new mortgage loans drawn during October fell 2.6% to HK$11.3 billion compared with September.

Meanwhile, new loans approved dropped 5.9% to HK$13.7 billion. The decrease was mainly due to decreases of HK$0.6 billion in approvals for secondary market transactions and of HK$0.3 billion in approvals for refinancing loans.

The report said the outstanding value of mortgage loans increased 0.5% to HK$600 billion in October.