HK - Housing 01 (May 08 - Aug 11)

[millionairemind]

Feb 18, 2009
HK luxe home prices crash

iHONG KONG - PROPERTY prices at Hong Kong's most prestigious location - Victoria Peak - plunged 41.4 per cent in the last quarter of 2008, a consultant group said on Wednesday.
The percentage drop compared to the third quarter was the largest for any luxury residential areas on Hong Kong island, CB Richard Ellis said in its report.

The plunge in prices at the scenic location, perched above the skyscrapers of Hong Kong and a favourite for the city's wealthy elite, was blamed on collapsing confidence during the economic downturn.

'Hong Kong's economy has decelerated markedly in the fourth quarter as investment sentiment and consumer confidence plummeted significantly due to the global credit crunch, striking a hard hit towards the property market,' the report said.

Property prices for all luxury properties on Hong Kong Island fell 35.4 per cent in the final quarter, the report found.

The fall was also the biggest on record in Hong Kong's luxury real estate market, even worse than during the Asian financial crisis in 1997-1998, according to the South China Morning Post.

The total number of transactions worth 10 million Hong Kong dollars (S$1.97 million) in Hong Kong amounted to only 575 in the fourth quarter last year, compared to 2,807 transactions over the same period in 2007, CBRE said.

In October, a 307sqm house on The Peak was sold to cartoonist Ma Wing-shing for HK$76 million, less than half its asking price.

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

[winston]

DJ MARKET TALK: HK Developers Bid Down; Underperformance Likely

0948 [Dow Jones] HK property stocks appear set for another underperforming day, with SHK Properties (0016.HK) indicated down 2.6% at HK$61.30 at pre-open, Henderson Land (0012.HK) down 2.8% at HK$24.60, Wharf (0004.HK) off 3.1% at HK$16.20, Sino Land (0083.HK), Hang Long Properties (0101.HK) each down at least 1%.

Sector already beaten down yesterday as higher-than-expected local jobless rate stoked fears potential home buyers would put off purchases, developers would need to cut prices. UOB KayHian says market "shocked" by surge in unemployment to 4.6%, which "effectively removed the last thread of hope that anyone might still be holding on to that property prices remaining stable."

[winston]

DJ MARKET TALK: Some HK Ppty Stocks Rebound; SHKP Top Sell -Citi

1102 [Dow Jones] HK developer stocks rebound with subindex now +0.2% vs HSI off 0.4%; subindex fell 3.0% Monday-Wednesday; sector recently reeling from raft of negative views following higher-than-expected local unemployment rate, with most brokers tipping more downside for physical property market.

Citigroup remains cautious on HK residential market, says falling rentals, thinner transaction volume will hurt investment appetite of property investors, while soaring unemployment will hurt confidence of end-users.

Expects "more significant downside" in property prices, rentals. Tips top Sell as SHK Properties (0016.HK). SHKP down 0.9% at HK$62.40, estate agent Midland (1200.HK) rebounds 1.4% to HK$2.16 after 3-day slide

[winston]

DJ MARKET TALK:HK Ppty Index +6.3%;Nomura Tips Sustained Recovery

1214 [Dow Jones] Amid ongoing debate of whether HK property market's recent sales increase sustainable or just false start, Nomura says 2 new data points "may swing the debate in favor of a sustained recovery of the mass housing market."

Says, first, after breaking past key 200 threshold the previous week, secondary volume rose another 32% on-week to 318; increased liquidity should lend credibility to 4.7% year-to-date gain in mass housing prices, help accelerate price rises.

Second, notes small site in Sheung Shui successfully drawn from Application List, will be auctioned May 5; while site too small to have any benchmarking effect, drawdown does signal more accommodative stance of government, should help developers' attempt on bigger sites as well as farmland conversion.

Nomura's top sector picks still SHK Properties (0016.HK), Henderson Land (0012.HK). Property sub-index +6.3% vs HSI +4.5%, playing strong catch-up

[winston]

DJ MARKET TALK:Too Early To Say If HK Ppty Rebound Sustainable-GS

1345 [Dow Jones] It's still to early to judge if pickup in HK residential property market is sustainable, Goldman Sachs says, noting rebound in secondary market price and volume could be due to seasonal factor as March-May is traditional sales season. Notes after last week's rally, HK developer sector trading at only 14% discount to NAV as of April 3.

Tips top sell ideas as New World Development (0017.HK) and Henderson Land (0012.HK). "While investors may still want to get some exposure to the rising expectation of house price stabilization, we do not believe Henderson Land and New World Development are necessarily the right choices as their residential land banks are too small and their track record on farmland conversion as a source of replenishment has so far been poor."

[winston]

DJ MARKET TALK: Goldman Upgrades HK Property Sector To Neutral

0900 [Dow Jones] HK property stocks' will probably outperform today, likely helped by Goldman Sachs upgrading sector to Neutral from Cautious; says earlier-than-expected signs of stabilization of major economies leads house to believe various governments' stimulus measures could help restore homebuyers' confidence, bring forward inflection point of price stabilization.

Goldman raises house's HK primary/secondary residential price forecasts from 20%/15% fall in 2009, 10%/5% fall in 2010 to 5%/0% fall in 2009, 5% rise each in 2010.

Tips top sector Buy as Sino Land (0083.HK), which has bigger residential land bank to benefit from potential price recovery in the longer run. Sino Land ended +2.9% at HK$9.33 yesterday.

[winston]

New projects boost property prices by Mandy Lo, The Standard HK

Robust sales in new residential projects helped prices in the secondary market rise around 7.9 percent since the beginning of the year, climbing for the fifth straight month, said Ricacorp Properties head of research Patrick Chow Mun-kit.

"The average selling price in 50 major projects in Hong Kong was HK$4,133 per square foot, versus HK$3,830 in December," Chow said.

"There is still room for prices in the secondary market to grow next month but the momentum may stop in June because of seasonal factors and worries about the financial tsunami's second wave."

Sun Hung Kai Properties (0016) said it has reaped about HK$4.5 billion from the sale of 620 units in its San Po Kong residential project The Latitude since April 18. The developer sold 130 units in the past two days alone at an average of HK$7,600 per sq ft. The price was 4.8 percent higher than the average of HK$7,255 psf for the first batch. SHKP began selling 160 flats in Block 6 yesterday after reporting vigorous sales in Blocks 7 and 8.

The Latitude comprises five residential towers with a total of 1,159 flats.

Meanwhile, there were 52 secondary market deals in the 10 biggest residential projects over the weekend, up 33 percent from a week earlier, Midland Realty executive director Andy Ho Ming-pui said.

"Homebuyers were attracted by the strong sales in the primary market, and some turned to the secondary market for long-term investment," said Ho.

Transactions in Kowloon rose the most, as buyers were influenced by new projects in the area, he said.

As of last Thursday, primary home sales tripled to 1,109 units from 349 apartments a month earlier and 5,833 secondary home flats changed hands, a 24.4 percent increase.

Commercial property sales jumped 57.1 percent to 872 deals, Lau said, citing Land Registry figures.

[winston]

Hmm...

APPLE DAILY

-- A low-profile property speculator has spent more than HK$200 million on more than 30 new apartments in two days at a new estate developed by Sun Hung Kai Properties (0016.HK), making it the biggest single property transaction since the economic downturn, sources said

[winston]

Hong Kong Home Prices May Rebound This Year, Centaline Says By Chia-Peck Wong

May 16 (Bloomberg) -- Hong Kong home prices may rebound to levels seen in early September, before the global financial system imploded, according to a report today by Centaline Property Agency Ltd.

“With sales transactions stabilizing at a normal level and investors preferring to buy fixed assets, we may see home prices back to those levels by year-end,” Wong Leung-sing, an associate director at Centaline, said in a phone interview today.

Four of the biggest mass housing estates Centaline tracks have already risen past prices posted in early September, said the agency, one of Hong Kong’s biggest. Mass estates are those where homes cost less than HK$10 million ($1.3 million).

Home prices in Hong Kong, where luxury residences are Asia’s second-most expensive, are rising amid hopes the worst may be over for the world’s biggest economies on spending by governments. A trade and financial hub for China, Hong Kong will benefit from any rebound in the world’s third-biggest economy as Premier Wen Jiabao’s 4 trillion yuan ($585 billion) stimulus package takes effect.

After global credit markets froze in the wake of the Sept. 15 bankruptcy of Lehman Brothers Holdings Inc., Hong Kong home prices fell as much as 25 percent off of their peak levels in June 2008.

Index Gains

Limited supply and low mortgage rates have encouraged buying, pushing Hong Kong home prices higher, Wong said.

“Some developers are accepting just 5 percent deposits from the purchase price, while others are offering interest-free payments for a few months,” Wong said.

( If the Housing market is so hot, why are they doing this ? )

An index of overall home prices in Hong Kong, including luxury residences that cost HK$10 million or more, has jumped 13.3 percent this year, Centaline said in a separate report.

After rising for five straight weeks, the index reached 64.34 as of May 10, its highest since Oct. 19 and 4 percentage points lower than the Sept. 14 level, Centaline said.

Henderson Land Development Ltd., controlled by billionaire Lee Shau-kee, and Bank of East Asia Ltd. are offering home loans fixed at 1.6 percent for the first two years to buyers at the builder’s new project in the northern district of Sheung Shui, Apple Daily reported today.

Rising Home Sales

The number of homes sold in April rose 8.9 percent from a year earlier to 9,856, the first gain in 11 months, figures from Hong Kong’s Land Registry show. The value of unit sales rose 14.6 percent to HK$31.6 billion, the first gain since June 2008.

The mass estate with the biggest gain in value this year is City One Shatin, where the average price rose to HK$4,023 per square foot, up 6.5 percent from September, Centaline said.

Ranking second was Taikoo Shing on the eastern part of Hong Kong island, where prices reached HK$6,821 a square foot, 2.7 percent higher than September’s, Centaline said.

[winston]

DJ MARKET TALK: HK Ppties May Fall; Jobless Highest In Over 3 Yrs

0928 [Dow Jones] HK property stocks may fall on profit-taking after Hang Seng Property Subindex's 5.2% gain over past three sessions, with HK jobless rate climbing to highest in more than three years; also negative with government and economists tipping unemployment to hit 8% by year-end, as slump in exports hitting HK companies. February-April jobless rate rose to 5.3% vs 5.2% in January-March period.

Francis Lun at Fulbright tips HK property stocks to fall about 1%-2% today, with any declines likely limited as jobless rate came in slightly below median 5.4% forecast of 11 economists surveyed by Dow Jones Newswires. "While it's likely that the unemployment rate will rise further ahead, ample liquidity in the market is likely to limit any falls in the property stocks for now," says Lun. Hang Seng Property Subindex ended +1.8% at 22,047 Tuesday.