HK - Housing 01 (May 08 - Aug 11)

[winston]

Not vested

DJ MARKET TALK: Stay Away From HK Developer Stks - UOB KayHian

0902 [Dow Jones] UOB KayHian notes HK property stocks fell 14% as a knee-jerk reaction to November's tightening measures by HK government, but has since been crawling gradually back up 6%, with individual stocks trading 8%-22% below November highs.

"The share price resilience reflects the general view that there is little downside on property prices from here in the near term, a view we concur with."

The house says with the government's determination to curb runaway prices, it is only apt to assign a higher risk premium to the sector, which means upside to stock prices could still be capped even if home prices resume its uptrend again.

At the current levels, UOB doesn't recommend exposure in the sector; due to their outperformance, SHK Properties (0016.HK) and Hang Lung Properties (0101.HK) are the house's 2 top Sells.


Source: Dow Jones Newswire

[millionairemind]

Singapore would probably be up there if it was included in the report...

Our mr. Marlboro will have to congratulate himself for putting us there....

HK tops least affordable housing list

Thu, Jan 27, 2011
AFP


HONG KONG has the world's least affordable housing, according to an international survey, a finding that is sure to stoke anger among many residents already fed up with runaway property prices.

Buying a home in the Asian financial hub, synonymous with its super-rich tycoons and glittering financial district, costs more than 11 times the city's average salary, outpacing London, New York and other major cities, US-based consulting firm Demographia said in a report released yesterday.

Sydney was ranked the second-least affordable major city, followed by Vancouver, and Melbourne.

The 7th Annual International Housing Affordability Survey compared home prices and household income in 325 cities in Australia, Canada, Hong Kong, Ireland, New Zealand, Britain and the United States.

It was the first time Hong Kong has been included in the survey. Hong Kong's median home prices in the third quarter of 2010 averaged HK$2.58 million (S$423,792), about 11.4 times the median household annual income of HK$225,400.

The most affordable homes in the survey were all in the US and Canada, with Saginaw in the US state of Michigan being the most affordable city, where the median house price was US$61,400 (S$78,500).

Atlanta was the most affordable major city, where the median house price was US$129,400.

Rising property prices have become a major concern for Hong Kong's population of seven million.

Worries about a property bubble have prompted Hong Kong's government to announce a series of cooling measures, including boosting land supply and new stamp duties to keep out hot money.

Home prices in Hong Kong have risen 50 per cent over the past two years, due to low interest rates, a robust economy and an influx of buyers from mainland China.

[winston]

DJ MARKET TALK: Nomura 'Reluctantly Positive' On HK Property Mkt

1407 [Dow Jones] Nomura says it's "reluctantly positive" on the HK property market; the house says while it still expects HK home prices to rise 15% in 2011, "we believe the associated risks are probably at their highest levels since 1996," as 4 out of the 5 warning signals it tracks (affordability, housing ladder, leverage, front-loaded demand, and supply-side response) are already flashing AMBER and will likely turn RED over the next 12-18 months.

For the Year of the Rabbit, Nomura believes stocks with micro re-rating stories and a strong CBD office angle should offer the best returns.

While it prefers commercial properties over residential, Nomura says with landlords' valuations approaching 0.82X standard deviation above the norm, developers with a strong commercial angle may be a better way to play the commercial theme.

Nomura's top picks are HKR International (0480.HK), Great Eagle (0041.HK) and Kerry (0683.HK) on the re-rating theme, and SHK Properties (0016.HK), HK Land (H78.SG) and Swire Pacific (0019.HK) on the commercial one.


Source: Dow Jones Newswire

[winston]

Not vested

HK to lift land supply to cool property mkt - paper

HONG KONG Feb 8 (Reuters) - Hong Kong's government will increase land supply in the coming fiscal year in a bid to cool property prices, the Ming Pao newspaper reported on Tuesday.

Financial Secretary John Tsang would announce a plan to make more residential land available for the list of sale in the coming fiscal year when he delivered his budget speech on Feb. 23, the newspaper said, citing sources.

The government would also announce plans for frequent auctions of residential sites and to increase the number of small apartment developments for tender to ensure a steady supply of small and medium-sized apartments, the report said.

Since announcing a stamp duty late last year, the government did not intend to introduce further financial measures to curb property speculation, the sources said.

Last November, Hong Kong announced a stamp duty of up to 15 percent on apartments sold within six months of purchase and tighter mortgages restrictions.

Housing prices have risen more than 50 percent since the beginning of 2009, according to property agent Centaline.

Hong Kong's dominant developer Cheung Kong (Holdings) Ltd (0001.HK) said residential property prices would likely rise 10 percent in 2011 because of a supply shortage, Apple Daily reported, citing Executive Director Justin Chiu.

http://www.reuters.com/article/2011/02/ ... 0P20110208

[winston]

Not vested

DJ MARKET TALK: HK Developers Fall; But Selloff May Be Overdone

1129 [Dow Jones] Hong Kong developers are down for a second consecutive session, with the property subindex 1.3% lower, compared with the HSI's 0.2% decline, as investors fret over a potential land supply increase.

On Tuesday, a source told Dow Jones Financial Secretary John Tsang plans to announce an increase in land supply during his budget speech on Feb. 23.

Still, the selloff looks a bit overdone, especially if the likely new measures are not heavy-handed.

DBS Vickers says about half of HK households are homeowners and "any housing market collapse could have significant repercussion effect on the entire economy," hence the house believes the government "will eventually strike a balance."

DBS adds, developers are expected to resume major property launches in early March, which could prompt a sector re-rating; it prefers Cheung Kong (0001.HK) and SHK Properties (0016.HK) within the sector.

Source: Dow Jones Newswire

[winston]

Buying a home holds no strong rationale
Monday, February 21, 2011

Hong Kong residential property prices are the most expensive in the world.
Those who are buying flats now are using one or more of the following five rationales.

First, I need to own a house to live in.

Second, I have a secure job, which ensures timely mortgage payments into the future.

Third, it is cheaper to buy than rent, thanks to the prevailing low interest rates.

Fourth, a home is a solid hedge against hyperinflation.

Fifth, I won't have any trouble selling my house as mainlanders remain keen on Hong Kong property.

All five rationale are flimsy. Many people in Germany, Sweden and France rent a house their whole life. They are happy as they have more disposable income.

Second, unless you work for the government, it is hard to find a very secure job in Hong Kong.

Third, many expect the US Federal Reserve to start raising rates by the end of this year.

Fourth, global inflation remains relatively low. Food prices are likely to ease later this year when the weather improves and China tightens credit.

Fifth, rich mainlanders are smart and they are unlikely to overpay.

In 1997, many people bought properties for the right reason. In 2003, many sold for good reasons. Only the future can tell who is right or wrong.


http://thestandard.com.hk/news_detail.a ... 10221&fc=1

[winston]

Can your HK Investment Property survive the HK Budget today ?

Have you check the recent bid / ask gap on your Investment Property ?

[winston]

Not vested. Who's worried about supply glut ? They are worried about whether the newsflows will continue to be negative over the next few quarters ...

DJ MARKET TALK:HK Developers Strong; No Supply Glut - DBS Vickers

1043 [Dow Jones] HK developers are rebounding more than the broader market with the property sub-index +1.3% compared to the HSI's 0.5% gain.

Although the headline from yesterday's budget speech is that potential flat supply will be raised to 30,000-40,000 units, investors are quickly coming to a realization that it's still up to developers to trigger auctions for the bulk of the land available to build new flats.

"The actual land supply is determined by the site quality and developers' appetite for land," says DBS Vickers, and so excessive concerns over a supply glut are unjustifiable.

The house adds the current sector valuation is attractive at a 22% discount to NAV. SHK Properties (0016.HK) is up 2.7% to HK$124.30 and Sino Land (0083.HK) is up 1.6% at HK$14.20.

Source: Dow Jones Newswire

[winston]

HK home prices 54% overvalued

HONG KONG - Hong Kong's home prices are 54 percent overvalued compared with their long-run average as measured by the ratio of home prices to rent, the Economist warned in a quarterly index report released Friday.

Meanwhile, Centaline Property Agency's weekly home price index rose to 94.81 - the fourth consecutive weekly rise.

The Economist's global house-price index ranked Hong Kong as the second most overvalued housing market in the world behind Australia.

In theory, the price of a home should reflect the value of the services it provides. People who choose to rent their homes buy those services on a monthly basis. Home prices should therefore reflect the rents that tenants pay, the report explains.

In Hong Kong, that ratio is now almost 53.7 percent above its long-run average - and it is still rising, it noted.

"Hong Kong's price rises are the steepest in our index," said the report, despite its being second only in the overvalued list.

Home prices in the city have risen more than 60 percent since early 2009, fueled by record low mortgage rates and abundant liquidity as well as an influx of mainland buyers. Last year, home prices in Hong Kong jumped by more than 20 percent.

And the latest home price index released on Friday by Centaline Property Agency Ltd shows that the city's home prices have increased for the fourth consecutive week to a high of 94.81.

Sky-high home prices is probably the one reason why more than 40 percent of residents live in rented homes, according to the index report.

The market is climbing even further above fair value, according to the report. Hong Kong is among the few housing markets which are more overvalued now than they were before the global financial crisis erupted in the third quarter of 2008.

Singapore and Switzerland are the two other markets where prices have also overshot since. Except for those three, the price-to-rent ratio has fallen in every other market.

Homes, already cheap in countries such as Japan and Germany, are growing cheaper in the wake of the financial crisis.

In Germany, where houses are currently undervalued by 12 percent, the price-to-rent ratio has been on a downward march since the early 1980s.

In Japan, the downward trend dates back to 1990 and the bursting of their property bubble. The market is now undervalued by more than a third.

Eddie Hui, a professor at the Department of Building and Real Estate at Polytechnic University of Hong Kong, said the home price rally seen in Hong Kong and Singapore is in part due to some "similar economic conditions" the two share such as fast economic recoveries after the 2008 financial crisis and ample liquidity.

But disturbingly for Hong Kong, the city still has the problem of limited land supply, the one major factor that has kept sending higher home prices, Hui added.

To drive down the home prices, "the government must boost the land supply," said Hui.

"Also, the demand has to be curbed," he added. However, increased inflation and record low interest rates have made this particularly difficult, the professor noted.

And Hong Kong, which has become the world's most expensive place to buy a home with the ongoing price run, may also be the most expensive place to rent an office.

New York-based real estate services firm Cushman & Wakefield Ltd, in a report it released earlier, tipped Hong Kong as home to the priciest offices in the world.

Prime office rents in Hong Kong, excluding taxes and service charges, soared 51 percent last year to HK$139.50 per square foot, 29 percent higher than Tokyo's HK$107.80(S$17.52), according to Cushman & Wakefield.

-China Daily/Asia News Network




http://business.asiaone.com/Business/Ne ... 66623.html

[kennynah]

in 1999, a singaporean friend relocated to HK... and being from a wealthy family, he bought a mid level apartment the size of ~700sqft... i remember he paid some HK3-4million for it... at that time, it seemed to be way too expensive... i've not stayed in touch with him ever since, but i'm suspect it is worth a lot more now...