〈Asian Post, November 10, 2018〉A number of factors including government actions mean the latest house price slump will not be as bad as in past times, but risks remain

That Hong Kong's property market is slowing is a given among brokers, analysts and many buyers themselves. But there is evidence that the fall this time is unlikely to be as severe as some past collapses.

The consensus view in the industry is that prices are likely to fall between 10 and 15 per cent over the next year. That would be far less than, for example, the 66 per cent plunge between the Asian financial crisis in October 1997 and July 2003, the peak of the severe acute respiratory syndrome (Sars) outbreak that disrupted the city's economy.

Steps by Chief Executive Carrie Lam Cheng Yuet-ngor's administration to boost housing supply and by the Hong Kong Monetary Authority to raise loan rates and order banks to tighten lending rules are helping to manage the decline, while low unemployment, higher savings rates and a strong local economy are also a cushion.

"We expect property prices in Hong Kong to soften by 10 to 15 per cent over the next six to 12 months," UBS Hong Kong equity analyst Dennis Lam said.

"It sounds like a lot. But if you think about where prices were at the beginning of the year versus the peak in August, it was up 14 per cent. So this mild crash over the next six to 12 months is merely getting back to where prices were at the beginning of 2018, or late 2017, which is still miles away from where we were in the 2008 financial crisis."

UBS had named Hong Kong as the city most at risk of a property bubble in a report in September, but Lam noted that for a number of reasons there could be a more gentle let-down for the market.

"It is a combination of factors: policy signals from the government, rising interest rates and the expectation of more rises and at the same time macroeconomic risks," Lam said.

〈Asian Post, November 9, 2018〉Falling prices of private housing in Hong Kong are starting to weigh heavily on the sales of government subsidised homes.

The number of transactions of used Home Ownership Scheme (HOS) flats fell to 180 in October from 451 in May - the lowest since records began in 1996, according to data from Ricacorp Properties. Transaction volume also fell by nearly 60 per cent from HK$2.3 billion to HK$930 million in the same period.

"Buyers' confidence has been very much affected because of the US-China trade war, a plunging stock market and larger discounts for newly launched HOS flats," said Derek Chan, head of research at Ricacorp.

He said transactions of used government subsidised homes could remain depressed for a couple of months but could recover slightly at the start of next year.

The average price of used HOS flats slipped 4.4 per cent to HK$5.19 million in October, a second month of declines. That has taken prices back to June levels of HK$5.2 million after they touched a record high of HK$5.44 million in August. The number of transactions of used flats under HK$5 million also fell to the lowest level ever in October at 715 since records began in 1996, according to Land Registry data compiled by Midland Realty.

Private home prices fell by a combined 1.5 per cent from July to September, according to data from the Rating and Valuation Department after the 28-month rally came to an end in July.

Data from Midland Realty meanwhile showed that overall transactions - both private and government subsidised flats - sank 60.7 per cent from 4,976 in May to 1,957 in October.

The number of transactions in the used public rental housing segment marked a four-quarter low in the July to September period at 161, down 14.4 per cent from the April to June period, according to brokers Hong Kong Property.

〈The Standard, November 9, 2018〉Price cuts for second-hand flats in different parts of the New Territories, including Tung Chung and Tin Shui Wai, are getting deeper.

The asking price for a three-bedroom flat in Kingswood Villas has been reduced to HK$8,419 per square foot, slightly lower than prices of flats in public housing estates.

A 456-sq-ft, two-bedroom flat Century Link in Tung Chung has been sold for HK$6 million, significantly lower than the asking price of HK$6.6 million.

A 589-sq-ft flat at Taikoo Shing in Hong Kong Island was sold at HK$12.7 million or HK$21,053 per sq ft. The transaction price was much lower than the HK$30,000 per sq ft originally sought by the vendor.

A 463-sq-ft apartment on Tower 9 at YOHO Town in Yuen Long changed hands for HK$6.5 million or HK$14,039 per sq ft, about HK$100,000 lower than the asking price.

A 552-sq-ft, three-bedroom flat at Tower 7 of Parc Oasis in Kowloon Tong was sold for HK$10.36 million or HK$19,847 per sq ft, marking a HK$1.44 million reduction in the vendor's asking price.

Walter Lam, Centaline Property marketing manager charged with the Vineyard and Palm Springs projects, said the number of flats available for sale in the secondary luxury residential market was declining as buyers become increasingly cautious.

〈The Standard, November 8, 2018〉Despite home prices in Hong Kong falling for the second consecutive month, private home rent levels are still climbing - for an eighth straight month. Industry insiders put the cause down to some buyers not wanting to purchase property in a bearish market and opting to rent instead.

Prices eased 1.4 percent in September from the previous month, government data showed, accelerating a decline from August's revised 0.08 percent slip.

But private rent levels rose 0.6 percent to a record high, according to the Rating and Valuation Department.

However, if home investors cannot get the price they expected amid the bearish mood, they might rent out the flat after a certain period of time, said Richard Lee Chi-sing, chief executive at Hong Kong Property Services.

"Rent levels usually lag behind the latest trend of home prices," said Lee, adding that private rent levels will eventually follow the downtrend of home prices if there are more rental listings.

Centaline Property said the number of rental deals made in Taikoo Shing in Quarry Bay last month rose to 50 from 42 in September as many potential home buyers took to renting instead.

The average per square-foot monthly rent in Taikoo Shing was HK$42.30 in October, up slightly from HK$41.90 in September.

Centaline cited a case in which a three-bedroom apartment in Wisteria Mansion was recently rented out for HK$37,000 after just being for sale at HK$27 million.

Midland Realty said 90 percent of its customers who booked viewing times were looking for rentals in City One Shatin in the New Territories.

〈China Daily, November 8, 2018〉A government site in Kai Tak has been awarded to a consortium formed by Wheelock Properties, New World Development (0017), Henderson Land (0012) and Empire Development Hong Kong for HK$8.33 billion, which was transacted at the low-end of surveyors' estimation.

The 104,000-square-foot site on the former airport's runway was sold at HK$14,502 per square foot in terms of gross floor area. It has a maximum gross floor area of around 575,000 sq ft, the Lands Department said.

The site on the waterfront land, which is designated for private residential purposes, is one of the nine sites in Kai Tak on the government's 2018-19 land sales program. The program comprises 15 plots capable of providing about 15,000 flats

The residential project will complement the development of East Kowloon business district with the opening of Sha Tin to Central Link, a Wheelock Properties spokesperson said.

CK Asset (1113), China Overseas Land & Investment (0688), K Wah International (0173) and Sino Land (0083), as well as Sun Hung Kai Properties (0016) were among other major developers who made bids for the site.

In May, Sun Hung Kai Properties (0016) paid HK$25 billion for a residential site in Kai Tak, which translates to a per-square-foot price of about HK$17,776. The latest transaction represented a 20 percent price drop in six months.

China's HNA has purchased sites at aggressive prices in Kai Tak over the past few years. It has bought four sites but sold three as it is facing liquidity risks.