〈Asian Post, June 16, 2018〉Developer Swire Properties yesterday revealed it had agreed to sell two office towers at its development in the east of Hong Kong Island for HK$15 billion, and would use the money for other projects in the city and Shanghai.

It would sell the 21-storey Cityplaza Three and the 24-storey Cityplaza Four at the Taikoo Shing residential and commercial development in Quarry Bay to Henglilong Investments Limited, the company said in a filing to the Hong Kong stock exchange.

"Swire Properties remains steadfastly committed to our home market of Hong Kong, and our long-term strategy has not changed," the company said in separate emailed comments.

Cityplaza Three has floor areas of 18,700 to 19,300 sq ft, while Cityplaza Four's floors are 23,600 to 24,300 sq ft, according to Swire's website.

The buyer was a company incorporated in the British Virgin Islands for the purpose of investment holding, the Swire filing said. It did not elaborate.

Swire also said via email that proceeds from the sale would go to projects including the redevelopment of Taikoo Place, near Taikoo Shing; the expansion of Pacific Place in the central Admiralty area; the extension of the Citygate commercial development on Lantau Island; and its new Qiantan project in Shanghai.

The sale comes not long after what was the world's most expensive real estate transaction, the HK$40.2 billion transaction last year that saw the 73-storey The Center tower in Central sold to a consortium of Hong Kong and mainland buyers.

The tower was sold by tycoon Li Ka-shing, Hong Kong's richest man, as part of a restructuring of his assets in the city.

〈Asian Post, June 16, 2018〉The interest rate upcycle is around the corner for Hong Kong's mortgage holders. Those planning to enter the heated property market must be especially careful about their ability to sustain commitments through this period. As expected, the United States Federal Reserve raised its benchmark interest rate by 25 basis points to 2 per cent. This was duly followed by the Hong Kong Monetary Authority (HKMA), which raised the base lending rate by the same number of points to 2.25 per cent.

Fed officials signalled two more rises to come before the end of the year. Since 2016, the Fed has raised rates seven times but, thanks to ample liquidity, local banks didn't have to follow the United States every step of the way despite the US-HK dollar peg.

However, conditions today are different. The short-term three-month lending rate between banks called Hibor has doubled to 2 per cent since the end of last year. One-month Hibor has hit 1.60 per cent, the highest level since 2008.

Since the vast majority of floating bank mortgage rates are tied to Hibor, the direction of local interest rates is clear. It's not a matter of if but when local banks succumb to pressure and start following US monetary policy. As borrowing rates have been at a historic low for over a decade, many first-time flat owners will find themselves in unfamiliar territory once their interest payments start going up.

Since the start of the year, the property and stock markets have been rosy, but risks are building. Actions taken by the HKMA since April to defend the Hong Kong dollar have tightened liquidity. A flood of initial public offerings, including the upcoming mega IPO of mainland smartphone maker Xiaomi, means investors will be borrowing heavily and putting upwards pressure on Hibor.

〈The Standard, June 15, 2018〉The one-month Hong Kong interbank offered rate, which is linked to mortgage borrowing costs, climbed for the 12th day to 1.6 percent yesterday -- near a 10-year high.

"The trend of a rising HIBOR is clear," said Norman Chan Tak-lam, chief executive of the Hong Kong Monetary Authority. "I believe it is just a matter of time before banks increase the saving deposit rates and the best lending rates."

The authority raised the base rate charged through its overnight discount window by 25 basis points yesterday to 2.25 percent after the US Federal Reserve raised interest rates by a quarter of a percentage point.

The Fed projects two more rate rises this year and three in 2019.

"Many people are concerned about the overheating of Hong Kong's property market," Chan said. "Hong Kong dollar interest rate normalization will be conducive to a more healthy development of asset markets, including the property market. But some volatility is unavoidable in the process."

A quarter-point increase by the US Fed presents little immediate risk to the SAR, which is shielded by ample liquidity and buoyant growth momentum, though it does raise the question of when local banks will push up the ceiling for rates they charge borrowers for the first time since 2006.

The Hongkong and Shanghai Banking Corp and Hang Seng Bank said yesterday they will not change the best lending rate -- currently at 5 percent.

〈China Daily, June 14, 2018〉The monthly mortgage repayment of homeowners in Hong Kong is expected to rise to 70 per cent of the city's monthly median income by the end of the year - the highest level in nearly two decades - as mortgage rates go up and home prices show no signs of abating, according to mReferral Mortgage Brokerage Services.

At present, the affordability ratio, which compares the monthly mortgage instalment to the median income of families living in private flats - was 60 per cent, indicating that Hong Kong home prices were hardly affordable, said Sharmaine Lau Yuen-yuen, the chief marketing officer at mReferral.

"As salaries are not likely to keep pace with the growth in housing prices, the ratio could even approach 70 per cent by the end of the year," she said.

Lau said the ratio showed that housing affordability had reached "alarming" levels for those trying to climb on the property ladder in the city.

The ratio compares the official median income of families living in private flats in the first quarter of this year - HK$39,600 - to the mortgage repayment for a flat of 500 square feet with a mortgage of 70 per cent of the flat's value and a repayment period of 20 years.

This came in at HK$23,720 or nearly 60 per cent of the median monthly income.How defence of Hong Kong dollar peg affects homebuyersPrices of used homes in the city have jumped 38.5 per cent in the 25 months up to April, according to data from the Rating and Valuation Department. In May, the prices of used homes on average hit HK$13,216 per square foot, up 14.7 per cent from a year ago.

〈The Standard, June 13, 2018〉A 2,200-square-foot flat in Belgravia at 57 South Bay Road recently sold for HK$66.3 million, with the seller taking a HK$6.6 million hit on the transaction, according to the Land Registry.

The property in the southern district sold at HK$30,000 per sq ft. The seller had bought the home with two parking spaces for HK$72.9 million in 2009, or HK$33,000 per sq ft.

Meanwhile, in the western district on Hong Kong Island, a duplex apartment in Kensington Hill in Sai Ying Pun recently sold for HK$114 million, or HK$50,000 per sq ft. The 2,277-sq-ft home is located on the top floor, with a rooftop deck.

Kensington Hill, which was completed by Wheelock's Properties in 2016, provides 75 apartments in a 32-story buildings. The sizes of the flats range from 532 sq ft to 2,277 sq ft.

In other news, Sun Hung Kai Properties (0016) is to sell four apartments by tender at its St Martin project in Tai Po's Pak Shek Kok.

Two of them are sized at 811 sq ft with three bedrooms, while the other two are sized at 851 sq ft, according to Allen Woo, general manager of Sun Hung Kai Real Estate Agency.

The period for receiving offers will be from June 22 to mid-July, and the price list for the remaining units will be released later this month, said deputy managing director Victor Lui Ting.