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Property News Weekly Digest
2018/6/2
〈The Standard, June 2, 2018〉Hong Kong's record-breaking home prices rose at their fastest pace in a year in April, the latest government data showed, as the city's scorching hot housing market showed no sign of cooling down.

A government index tracking private home prices in April climbed 1.84 percent compared to a month ago, growing at the fastest pace since April 2017, according to the Rating and Valuation Department. It jumped 13.91 percent year-on-year, and 6.6 percent so far this year.

The index also saw its longest ever record-breaking streak, peaking for an 18th consecutive month in April, according to property agency Ricacorp Properties.

Ricacorp recorded an average per square-foot price of HK$14,609 in 50 major private housing estates in Hong Kong last month.

The financial hub has one of the least affordable housing markets in the world, with prices of apartments doubling between 2010 and 2017.

A small flat under 431 square feet on Hong Kong Island costs an average of HK$17,000 per sq ft, according to the Rating and Valuation Department's April data.

At least eight major private housing estates in the city saw higher price growth in the first five months this year compared to the whole of 2017, according to Centaline, one of the city's largest property agencies.

As housing prices continue to climb to historic peaks, some property investors now park their money at an unlikely spot - parking spaces, which tripled in value between 2010 and 2017 to an average of HK$1.4 million.

Meanwhile, mortgage loans approved in April decreased by 5.6 percent compared with March to HK$37.3 billion, said Hong Kong Monetary Authority.

〈China Daily, June 1, 2018〉As home prices in the secondary market rose for a 25th consecutive month, the new chairman of CK Hutchison Holdings and CK Asset Holdings urged the government to boost land supplies as a long-term strategy.

Shrugging off concerns about increased supply of new housing and an imminent rise in interest rates, flats smaller than 430 sq ft saw the greatest price gains, with units at major housing estates selling at record prices, government figures showed.

Victor Li Tzar-kuoi, in his first public appearance since taking the helm at the companies from his father Li Ka-shing - Hong Kong's richest man - said "houses are for living in, not just investment".

Victor Li, who was at the opening of A S Watson Group's retail concept store CKC18 in Cheung Kong Center, said it was difficult to predict property price trends because house supplies were still at a low level and the market remained bullish.

Li's comments came after the release of official data yesterday showing home prices had risen for 25 months, the longest property market bull run in 25 years.

The Rating and Valuation Department said an index of secondary-market home prices climbed 1.84 per cent to 375.9 in April, from a 1.15 per cent gain in March.

Prices for flats smaller than 430 sq ft gained 1.94 per cent to 414.3 on the index.The rental index advanced 0.42 per cent to 190.3, indicating an increase in leasing costs, the figures showed.

"Buyers are willing to chase after higher prices. They worry that flats will become more expensive if they do not act now," said Derek Chan, the head of research at Ricacorp Properties. "That explains why more homes have sold at record prices."

〈The Standard, May 31, 2018〉K Wah International Holdings, Fleur Pavilia by Peterson Group and another one by New World Development - will provide a combined 5,000 new flats.

Sammy Po Siu-ming, chief executive of Midland Realty's residential division, said multiple launches of residential projects next month will attract significant market attention, prompting developers to make a strong push to sell as many units as possible.

He said that with a significant increase in new supply, developers will remain conservative in pricing and they will ensure prices are affordable to entice homebuyers from different segments.

Louis Chan Wing-kit, managing director of Centaline's residential department and chief executive for Asia-Pacific, said the local market can completely absorb the upcoming new supply because of strong pent-up demand.

More liberal downpayment terms, involving much reduced cash outlay, will also boost sales.

Centaline currently has a 5,000-strong workforce and it plans to recruit 200 more staff to bolster sales and marketing at 10 new branches in the New Territories, where most of the new residential developments are situated, he said.

Three new projects in the New Territories will provide more than 3,100 new flats, while Hong Kong Island will see two new residential developments offering almost 1,000 apartments. More than 1,700 new flats will become available in the short term in Kowloon.

〈Global Times, May 30, 2018〉Hong Kong has limited space and a dense population. Most of the factories have moved to the Chinese mainland. The developed fi nancial and real estate industries act as two pillars of its economy.

However, the booming real estate industry has raised business costs, making it di cult for industries to settle in Hong Kong. Finance and real estate have “locked up” the Hong Kong economy. Since there are few other industries, there’s limited leeway for the city to increase job and income growth.

The government of the Hong Kong Special Administrative Region has been struggling to o er an e ective solution to change the economic situation.

The fundamental reasons include changing industrial policies and a lack of policy researchers in the related industrial fi elds. But there are opportunities for industrial revitalization. This would require the government to set the goal of building Hong Kong into the San Francisco of Asia.

In the modern era, education has become a crucial resource for productivity in social development.

Hong Kong happens to have a high-quality education industry. The University of Hong Kong (HKU) and other universities have laid a solid foundation for the local biotechnology industry.

The education and technology fi eld can combine with the huge market in the Chinese mainland, creating miracles in the biotechnology industry.

For instance, according to HKU, it has invented a patented technology named “fl ow-through hybridization”and licensed it to a mainland biotechnology company called Hybribio.

〈Asian Post, May 29, 2018〉Hong Kong millionaires are more aggressive than those in the United States when it comes to investing for parents and children, according to a survey by US brokerage Charles Schwab.

The online survey, conducted in February and released yesterday, polled 2,000 Hong Kong and US investors who earned up to US$225,000 a year and had up to US$1 million to invest.

"There is a lot of financial pressure to take care of parents while at the same time to buy a property for children," said Michael Fong, the managing director of Charles Schwab Hong Kong.

Half of the respondents in Hong Kong were investing for their families, and 75 per cent said they wanted to set aside funds for their parents, compared with only 25 per cent in the US.

Hong Kong investors were also more likely to buy flats for their children - 41 per cent said they planned to buy property for their children, as opposed to 20 per cent in the US and 33 per cent on the mainland.

In terms of inheritance, 55 per cent of Hong Kong investors wanted to grow their funds to pass on to their children in the next 10 years, as opposed to 43 per cent in the US.There is a lot of financial pressure, to take care of ageing parents while at the same time to buy a property for childrenMichael Fong, managing director, Charles Schwab Hong KongAbout 47 per cent of Hong Kong investors aimed to double their investment yield in the short term, compared with 32 per cent in the US. Investors in the city were also more likely to invest in real estate, with 43 per cent saying it was their long-term investment goal, compared with 27 per cent in the US.

The survey also found that, at 80 per cent, more Hong Kong investors were willing to invest internationally, compared with 16 per cent in the US.