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Property News Weekly Digest
2018/11/3
〈China Daily, November 3, 2018〉The number of new private homes approved for sale in Hong Kong during the third quarter hit a 14-year high after a market cooling measure took effect in June, according to the government.

The news came as prices in the world's most expensive property market continued to slide.

According to a paper put before the Legislative Council's housing panel yesterday, the Lands Department issued presale consent to developers to sell 12 uncompleted residential projects, comprising 6,979 flats, from July to the end of September.

The quarterly figure was the highest since January 2005. Four of those projects have already been launched for sale.

The department's tightening of the so-called consent scheme, intended to ensure the timely release of first-hand flats, was among six housing initiatives announced by Chief Executive Carrie Lam Cheng Yuet-ngor in June.

Analysts said the accumulated result of past measures to boost land supply, rather than any government scheme, had led to a jump in the number of flats approved for presale.

"I don't necessarily see a causal relationship between having more flats ready for sale and the tightening of the consent scheme," said Wong Leung-sing, senior associate director at Centaline, an estate agency.

"Developers are selling more flats also because land supply was increased in the past few years by both the previous and current administrations. This includes the increase in land sales."

〈The Standard, November 3, 2018〉Plot draws eight bidders, compared with 15 to 20 for nearby land parcels last year, as developers turn cautious in latest sign of strain in the market

The first residential plot for sale on the runway section of the former Kai Tak airport received eight bids from developers, fewer than analysts had expected and a further sign of weakness in the property market.

Ahead of the tender that closed yesterday, analysts had lowered estimates by as much as 15 per cent on the value of the site, which has a gross floor area of up to 574,615 sq ft.

"It is worse than we expected. Last year, similar-sized plots in Kai Tak usually attracted about 15 to 20 bids," said Alvin Lam, director at Midland Surveyors.

"Developers do not want to take much risk as they are seeing a souring market."

The city's property market has come under pressure of late from a worsening US-China trade war and rising interest rates.

A price index that tracks secondary homes fell 1.44 per cent in September over the previous month, the second consecutive monthly decline, according to the Rating and Valuation Department. The drop was significantly larger than the 0.08 per cent decline in August.

Several investment banks, meanwhile, have forecast a drop in Hong Kong's house prices, some by as much as 15 per cent, in the next year..

〈China Daily, November 2, 2018〉Former financial services and treasury chief Ceajer Chan Ka-keung has moved to assuage fears that the upward momentum in local interest rates would dent the city’s property market.

Further rate hikes would not have an obvious impact on housing prices as they’re “within expectations”, he said.

“It’s no surprise seeing interest rates going up. Actually, the market has been waiting for it for a long time,” he told China Daily.

Chan, who’s now an adjunct professor at the Business School of the Hong Kong University of Science and Technology, said he believes a low interest rate environment is not healthy for Hong Kong’s economy as it has caused “too many asset bubbles”.

Last month, a cluster of major Hong Kong banks took the cue from the US Federal Reserve and the Hong Kong Monetary Authority by lifting their lending rates for the first time in more than a decade, ending an era of cheap lending in the world’s most expensive property market.

The HKMA — the city’s de facto central bank — raised the benchmark interest rate charged through its overnight discount window by 25 basis points to 2.5 percent in lockstep with the Fed and with immediate effect.

It was soon followed by Hongkong and Shanghai Banking Corp, which jacked up its best lending rate — the interest the HKMA charges commercial lenders — by 12.5 basis points to 5.125 percent for the first time in 12 years.

〈The Standard, November 1, 2018〉The Rating and Valuation Department released a private domestic units price index for September that shows a fall of 1.44 percent from August to 388.8, widening the decline of less than 0.1 percent in August, while the index soared 14 percent on a yearly basis.

The 28-month uptrend ended in August.The price of flats between 700 to 999 square feet dropped 1.88 percent.

Meanwhile, the private domestic units rental index in September recorded an increase for the eighth consecutive month at 197.8, up 0.6 percent compared with the previous month.

Sharmaine Lau Yuen-yuen, chief economic analyst at mReferral Mortgage Brokerage, predicted more negative equity cases as some owners were tied to a 95 percent mortgage plan.

She believes Hong Kong banks will increase the interest rate at the end of the year, following the US Federal Reserve rate normalization process.

The number of mortgage applications in September decreased month-on-month by 55.6 percent to 7,977. Mortgage loans approved in September decreased by 33.8 percent to HK$31.6 billion compared with August.

〈The Standard, November 1, 2018〉Singapore has surged to the No 1 spot in price gains in the luxury housing market among cities worldwide, overtaking Hong Kong where a slowdown has pushed the city out of the top 10 by price momentum, according to property firm Knight Frank.

Luxury home prices in Hong Kong increased 5.5 per cent during the three months to September from a year earlier to rank 14th among 43 cities tracked by Knight Frank's quarterly prime global cities index.

Singapore took the top spot after prices rose 13.1 per cent for the quarter, outpacing Edinburgh and Madrid where prices gained 10.6 per cent and 10.1 per cent respectively.

Vancouver ranked last with a price decline of 11.2 per cent, trailing Istanbul where prices were down 6.2 per cent.

"Although deep-pocketed investors might not have suffered that much from declines in the stock market due to uncertainties over the US-China trade war, sentiment has turned sour," said David Ji, the head of research and consultancy for Greater China at Knight Frank.

In a sign that underscores that shifting confidence in the Hong Kong market, some owners of luxury flats have started to slash prices to unload their properties.