〈Asian Post, June 3, 2017〉China’s richest man Wang Jianlin has lost up to 200 million yuan ($29.3 million) from a deal brokered in Spain three years ago because of a shift in exchange rates. Wanda Hotel Development Company Ltd announced on Friday it had sold its stake in Plaza de Espana 19 Development SLU to Spanish property company Baraka Global Invest SLU.

The sale by Wanda Hotel Development, a subsidiary of Dalian Wanda Group chaired by Wang, was completed on Thursday. As a result, shares in the Hong Kong-listed Wanda Hotel Development climbed 1.45 percent to close at HK$0.7 (9 cents) on Friday. According to a previous announcement by the company, the sale price was 272 million euros ($305 million), which was higher than the 265 million euros Wanda Hotel Development paid for the Plaza in 2014.

But because the euro has deprecated since then and the yuan has strengthened in the past few years, the company has lost out on the deal.

Wanda paid the equivalent of 2.2 billion yuan based on the exchange rate in 2014. The 272-million-euro selling price this week translates into 2.08 billion yuan based on current rates.

So, Wang and his company have lost almost 200 million yuan over the deal. As a landmark in Madrid, Plaza de Espana used to consist of a luxury hotel, a business center and a number of apartments before 2006.

But it had been empty until Wanda took control three years ago. After it was snapped up, the company planned to restore the Plaza to its former glory with a 200 room luxury hotel, high-end retailing space and 300 residential apartments. Unfortunately, Wanda’s blueprint was never turned into reality. A change in attitude of the Spanish government and Strong opposition by local residents to restoration work put the plan on ice for at least two years.

Eventually, Wanda lost interest in the project. According to market research firm ASKCI Consulting Co Ltd in Shenzhen, the group has spent more than $15 billion on overseas acquisitions between 2012 and 2016.

Up to $7.5 billion has been spent on cultural and entertainment projects and $3.5 billion on commercial properties.

〈The Standard, June 2, 2017〉Non-bank money lenders funded nearly 9 percent of mortgages for new apartments completed last year as the authorities shy away from extreme measures for fear of triggering a housing collapse

Hong Kong’s latest attempt at cooling home prices in one of the world’s most expensive property markets is expected to send buyers scouring for loans in the unregulated shadow banking industry, spreading risk across the financial sector.

Home prices in Hong Kong, where a nano-apartment of less than 18.5m2 can cost as much as US$500,000, have surged more than 137 percent since the financial crisis in 2008, propelled by a supply shortage, low interest rates and big flows of money from Chinese investors.

They pose a huge challenge for the territory’s incoming chief executive, Carrie Lam .

The cost of accommodation in the territory, where home ownership is a distant dream for many, was among the triggers for mass protests in late 2014.

Authorities have failed to rein in prices, despite eight rounds of mortgage tightening by the Hong Kong Monetary Authority (HKMA) since 2009, on top of a series of tax and regulatory policies imposed by the government.

As those measures have curbed bank lending, finance companies have leapt into the gap. They funded 8.7 percent of mortgages for new apartments completed last year, according to Centaline Property Agency. For flats that have a completion date this year, the figure surges to 15.5 percent and is expected to rise further, it said.

Few expect the authorities to take extreme measures — such as imposing punitive taxes on Chinese buyers — for fear of triggering a collapse in prices in a real-estate industry that accounts for 10 percent of Hong Kong’s economic output.

Revenue from properties and related investments is estimated to have more than doubled in the fiscal year that ended March from the previous year, and is the second-biggest income generator for the government.

However, there is a danger that if the non-bank lenders overstretch they could also hurt confidence in the real-estate market.

In Canada, problems at the nation’s biggest non-bank lender, Home Capital Group, have helped to drive some buyers away from the hot Toronto residential market.

Controlling the flood of capital flowing across the border is a huge challenge for the Hong Kong government — cash-rich Chinese last year accounted for about 21 percent of buyers of new homes, according to Centaline.

"The major concern to the government is that lower land prices would greatly affect the government’s revenue, which has been very volatile as a large part of that is from land premiums," Natixis economist Pascal Siu said.

The latest cooling steps announced 10 days ago — mainly making it costly for banks to make mortgage loans — were not aimed at targeting property prices, but at strengthening lenders’ risk management, a spokesperson for HKMA said.

"The focus of the regulators is to ensure that the bubble in the property market doesn’t dent the bank balance sheets," an executive at a foreign bank with mortgage business in Hong Kong said. "They don’t want to rock the boat and make the property prices correct by 10 to 20 percent in a short span."

〈Asian Post, June 1, 2017〉Cheung Kong Property Holdings will raise the price of its third batch of Ocean Pride flats by up to 10 per cent, a week after selling out all 842 of the project's earlier units. The developer's move reflects a marketing strategy that underscores the expectation that Hong Kong's record home prices will not succumb to gravity.

Prices for the 122 units in the third batch of Cheung Kong's Ocean Pride flats next to the Tsuen Wan West railway station would be priced between HK$12,700 per sq ft and HK$22,000 per sq ft after a 20 per cent discount, the developer said.

"The price is about 2 to 10 per cent higher than the previous launches," William Kwok, a director of the developer's wholly owned subsidiary Cheung Kong Real Estate, said.

However, the developer is yet to announce when the new units, estimated to have a market value of HK$1.6 billion, will go on sale.

Cheung Kong Property Holdings, controlled by Hong Kong's richest man Li Ka-shing, has sold 842 units at Ocean Pride so far, generating sales revenue of HK$8.9 billion.

Cheung Kong will not be the only developer in the city that is raising prices. Residential property prices in Hong Kong, already the world's most expensive major urban centre, were expected to increase by another 5 to 10 per cent in 2017, according to a forecast by property consultancy Knight Frank, despite efforts by the city's government and monetary authority to curb price rises.

The government has raised the stamp duty on residential property purchases by non-local buyers to 15 per cent. The Hong Kong Monetary Authority on May 19 ordered banks to cut the amount of allowable loans on homes by 10 percentage points.

Both of these moves were aimed at deflating a property bubble in the city that has already surpassed the previous peak in 2015.

Still, prices of luxury residences that cost more than HK$12 million are likely to rise by 10 per cent this year. Nearly one in every five buyers of such residences were likely to be from the mainland, Knight Frank said.

"It is the highest proportion since 2013 after the buyer's stamp duty was introduced," Thomas Lam, a senior director and head of valuation and consultancy at Knight Frank, said. While mainland buyers are snapping up flats and luxury homes, mainland developers - who have spent HK$40 billion buying land this year - are also piling on to add to Hong Kong's housing stock

〈China Daily, June 2, 2017〉The Hong Kong Monetary Authority — the city’s de facto central bank with the added responsibility of a banking regulator — has laid down further restrictive mortgage lending rules that have been widely sniffed at by developers and their agents as nothing more than window dressing.

But these rules, mild as they are, appear to have given banks an excuse to back away from the fierce fight for market share in the mortgage lending business before everyone gets a bloody nose and a black eye.

Nobody can remember, or cares about, who started the fight which has seen ever thinning mortgage loan margins offered by the combatants to woo homes buyers. Not anymore. The two biggest lenders — HSBC and Bank of China (Hong Kong) — have widened the spreads of new mortgage loans, albeit by a tiny margin. Other banks, including Standard Chartered and the Bank of East Asia, have followed suit.

〈The Standard, June 1, 2017〉The public coffers have expanded by nearly HK$50 billion in one month, thanks to the sale of two prime commercial sites in Central and Kai Tak. It is plausible that the next financial secretary - no matter who this individual will be - will come under pressure for yet another time to splash around handouts to please a community that is suffering from the backlash of an expensive property sector.

By normal measures, the land sales should be seen as good news, but public reactions have tended more towards the incredulous rather than appreciation.

The Kai Tak commercial site was sold for an astronomical HK$24.6 billion, which readily smashed the record set only last month with the sale of the former Murray Road multi-story car park in Central, which sold for HK$23.2 billion.

The public watched the sales with increasing worry, knowing they would add further fuel to the red-hot property market.

The sales must also be bad news for those in the government whose high priority is to cool the sentiments that are driving scores of home buyers to ignore warnings in their desperate dash for down-sized homes.

Contrary to recent sales of residential sites that were mostly snapped up by mainland developers, the commercial ones on Murray Road and in Kai Tak were bagged by local property market leaders Henderson Land and Nan Fung Development.

Mainland competitors seemed to be holding their horses after expanding aggressively in recent months. And that's curious. Was it because those developers ran out of cash after their vigorous expansion here? Was it due to some reasons that prompted them to exercise self-restraint after sounding alarm bells among authorities and the community? Or was it due to a sudden loss of interest in the SAR's property market?

The probable answer is that commercial development is not their cup of tea.

Unlike residential developments which can produce fast turnover, commercial projects are long-term investments that require complex management skills.

Nan Fung's managing director Donald Choi Wun-hing told the press after winning the bid that the Kai Tak project is meant to be a long-term investment including Grade A office space, a boutique hotel and underground shopping facilities.

That is quite distinct from the "buy, build, sell and go" characteristic of most residential projects. Are the mainland developers prepared to devote the necessary time and attention for commercial property?

Such projects are not simply block- building exercises that can be achieved by putting the bricks together. In addition, professional management is needed to ensure the facilities remain impressive. Hong Kong companies are certainly leaders in this regard.

That said, it is likely local companies will face keen competition from the mainlanders once the latter feel confident about their "soft power."

Although the increases are small, resulting in an extra monthly payment of about HK$200 for an average-size mortgage loan, the banks’ message is clear. People who’re obsessed with buying homes need to realize that the abnormally low borrowing costs that have helped fuel the property market frenzy in the past few years is fast becoming a thing of the past.

The market estimates there’s an 80-percent chance of a further 25 basis-point rise in US interest rates at this month’s meeting of the US Federal Reserve’s policy committee. Hong Kong had kept its rates unchanged following the previous two US rate hikes.