HK - Housing 04 (Apr 16 - Jun 24)

[winston]

<Research Report>Citi Expects HK Home Prices to Rise 8% in 2H16; Property Developers Have Upside Potential

Citigroup, in its report, said second-hand flat transaction volume has experienced a continuous recovery of volumes.

35-estate weekly volume has stayed at an average level of around 70 deals per week for the past 20 weeks, a significant recovery from an average of 34 deals before.

The rebound is believed to be caused by pent-up demand before, and Citigroup expected the 2H16 volumes to be about 5,000 deals per month, with property prices up 8% in 2H16 and up 3% in 2016.

The broker said the developers stocks have increased 9% year-to-date, outperforming HSI.

The broker believed the property price has seen its bottom in March, thus expected the developers to be strong, with top picks including SHK PPT (00016.HK), NEW WORLD DEV (00017.HK), LINK REIT (00823.HK) and HENDERSON LAND (00012.HK).

Source: AAStocks Financial News

[winston]

Hong Kong’s property cartel aligned against CY Leung over second term

The upcoming election for chief executive has average citizens directly at odds with property tycoons when it comes to the pro-affordability housing policies of incumbent CY Leung

Replacing CY Leung with someone sympathetic to big business would signal a revival of pro-developer policies in the market

Affordability is still strained in Hong Kong even with slowing demand and rising supply.

UBS maintains its view that Hong Kong home prices could tumble by as much as 30 per cent by the end of 2017 due to a deteriorating economy, rising unemployment rates and lower inflation.

Even though prices could tumble by 30 per cent, developers are only selling the minimal amount of flats and holding back development of their land bank.

Indeed, Hong Kong’s overall property sales volume plunged nearly 40 per cent year-on-year in the first half of the year.

The chief executive will be selected in March next year by a 1200 member Election Committee dominated by business and professional elites.

As Hong Kong’s wealthiest citizen, Li Ka-shing has much at stake in the upcoming March selection process for chief executive.

Though Li didn’t mention Leung in a recent Bloomberg interview, he said Hong Kong’s in the worst shape he’s seen in the past 20 years.

He didn’t offer any solutions other than to encourage people to study and work hard to pay for his flats.

Source: SCMP

http://www.scmp.com/business/article/19 ... econd-term

[winston]

According to agents, the number of flats for rent is half what it was a year ago and rents have risen about 10 percent as demand is high.

For instance, you cannot find a flat below HK$9,000 per month now in Tin Shui Wai blue chip Kingswood Villas.

And secondary property prices have, in general, rebounded 15-20 percent from the trough in the first quarter.

Source: Dr Check, The Standard

[winston]

Hong Kong Property Stocks Overheat as Outlook Improves: Chart

by Richard Frost

As far as stock investors are concerned, talk of a plunge in Hong Kong property prices is overdone.

An index of real estate companies listed in the city has surged 35 percent from a three-year low in January as traders scale back bets for higher U.S. borrowing costs and home prices rebound from a 13 percent slump.

Such exuberance has lifted the relative strength index of property stocks to 80.2, far above the 70 level that signals to some traders shares are overbought.

Source: Bloomberg

http://www.bloomberg.com/news/articles/ ... oves-chart

[winston]

Citibank: HK Home Prices May Continue Rising in 2H16

Citibank announced the results of its latest survey on the home-buying intention of Hong Kong citizens.

Survey found that the home-buying intention of Hong Kong citizens in the second quarter was similar to that in the previous quarter.

13% interviewees expressed interests in buying homes now, down 2 ppts quarterly; 23% had general interests, up 4 ppts quarterly; and 64% said they had no interests at all, down 2 ppts quarterly.

Lawrence Lam, Head of Retail Banking at Citibank, said the survey suggested that the proportion of interviewees who expected housing prices to fall in 12 months reduced the first time since 2Q15, reflecting some Hong Kong citizens considered the adjustment of home market became slightly steady.

The bank forecast Hong Kong property prices to continue rising in 2H16.

Source: AAStocks Financial News

[winston]

Hong Kong’s new private flat supply to reach 93,000 over the next 3 to 4 years, highest since 2004

Hong Kong’s supply of new flats is expected to climb to 93,000 over the next three to four years, the highest level since September 2004, according to data released by the Transport and Housing Bureau.

The latest supply estimate, as of the end of June, is equivalent to an average of 23,000 new flats per year.

Source: SCMP

http://www.scmp.com/property/hong-kong- ... ver-next-3

[winston]

Property prices show demand still strong

The Hong Kong Monetary Authority said new mortgage loans drawn down totaled HK$17.8 billion in June, up 15.8 percent from May.

The number of applications stayed at around 9,900 per month. Outstanding loans stood at HK$1.084 trillion and 89.8 percent of new loans are priced with reference to the Hong Kong interbank offered rate.

As one-month HIBOR is so low at 0.239 percent, even though most of the new loans were priced in the range of 2 to 2.5 percent banks can still make profits. That is why local banks are still keen to tap this market.

Secondary market prices in Tin Shui Wai Kingswood Villas went up 20 percent from the beginning of this year. This shows that the actual demand is still large.

Data showed that future supply of new flats will reach 93,000 units in three to four years. The government is selling land to build about 18,000 new units per year. Probably, it can satisfy the new demand of 20,000 units per year.

Where is the demand coming from?

Hong Kong's elderly live longer than before. The younger generation needs to buy new flats if they want to live independently. The yuan's weakness is another incentive for people to hold more HK dollar-denominated assets.

Source: Dr Check, The Standard

[winston]

Hong Kong Housing Price Rebound May Be Short-Lived, Analysts Say

by Frederik Balfour

Short-term sentiment buoyed by equity markets, dovish Fed
Nomura’s Gao expects prices to fall up to 35% from peak levels

The government forecasts that 18,203 new units will be completed this year, part of a pipeline of 93,000 expected in the next three to four years.

Source: Bloomberg

http://www.bloomberg.com/news/articles/ ... alysts-say

[winston]

Time to buy local developers

In Hong Kong, Centaline's index for big housing estates rose to a 25-week high.

It's not too late to buy Sun Hung Kai Properties (016), Sino Land (083) or the more volatile Midland Realty (1200).

Source: Dr Check, The Standard

[winston]

Don’t jump recklessly into Hong Kong property market, minister warns

Paul Chan says potential buyers should take a cautious approach given the large supply of new flats in the pipeline

He said buyers should remain cool-headed as the supply would reach 93,000 new flats in the next three to four years, the highest since September 2004, and the government was determined to meet its target of adding 18,000 flats by the end of this year.

Overall property sales in Hong Kong fell 11.3 per cent last month from June, the Land Registry revealed earlier this week.

Source: SCMP

http://www.scmp.com/news/hong-kong/econ ... ster-warns