〈Asian Post, August 5, 2017〉Guangdong developer Times Property said yesterday that it remained confident about an improvement in home sales during the second half of the year despite tighter policy measures.

"The government starts a tightening cycle every two or three years, and every time the market expresses pessimism, it is as if real estate companies would die - but that has not happened," said Times Property chairman Michael Shum Chiu-hung. Shum said the price curbs imposed by the local governments would not affect the company much as most of its land banks were bought at lower costs in 2015 and 2016.

Although mainland regulators shut a number of funding channels for developers such as domestic bond issuance, Shum said he believed Beijing would still encourage real estate companies to seek financing through the public markets.

The company said house purchase demand in big, regulated cities would continue to be suppressed, while transactions in third- and fourth-tier cities would remain active, especially in satellite towns close to the core metropolitan areas.

The company's core profit, excluding one-off items, rose 17.6 per cent to 635.7 million yuan (HK$739.4 million) in the first half, thanks to the sales increase. However, net profit was down 9 per cent to 497.8 million yuan, largely due to the early redemption of senior notes within the period.

Times Property shares fell 7 per cent to HK$5.99 yesterday after the results announcement.

Shum admitted that funding from banks had been "delayed" recently as lenders enforced stricter checks on mortgage lending. But he remained confident about Times Property achieving its 2017 contracted sales target of 32.5 billion yuan. The company had earlier set an ambitious goal of annual sales of over 100 billion yuan by 2020.

With most of its projects in Guangzhou, Foshan and other cities in Guangdong province, the homebuilder recorded 20.1 billion yuan contracted sales in the first seven months, a 50 per cent year-on-year growth.

As of June 30, the company had secured land reserves in eight cities covering a total area of 14.5 million sq metres, which would be sufficient to support the company's developement over the next three to five years.

Shum said Times Property would focus on its investment in the "Big Bay Area", which covers Guangdong, Hong Kong and Macau, as he was sure it would benefit the most from the country's industrial upgrading and also attract young professionals in the process, which in turn would support the property market.

〈Asian Post , August 5, 2017〉Outbound property investment from China has slowed due to tighter capital controls and affected real estate prices from London to Hong Kong, global financial holding company Morgan Stanley said in a recent report.

According to the report, outbound property investment by mainland Chinese firms was already down 82 per cent from a year ago, and is expected to fall 84 per cent to US$1.7 billion for the whole of this year, and by another 15 per cent to US$1.4 billion next year. That trend will create headwinds for prices in Hong Kong, the US, Britain and Australia over the medium term.

"Property developers are now struggling to transfer capital offshore and regulators are tightening offshore financing," Morgan Stanley analysts said.

Late last year, policymakers spoke out against "irrational" overseas investment in sectors such as real estate, hotels, cinemas, media and sports club businesses, which are perceived as a means of moving wealth offshore. These sectors are on Beijing's so-called negative list, which are considered no-go areas for Chinese investors.

Over the past month, pressure has intensified, with the China Banking Regulatory Commission reportedly cutting off funding for Wanda Group's overseas deals, sending a chill through China's business community. On July 20, the government urged the business community to allocate financial resources to the "One Belt,

One Road" initiative instead of outbound activities that "blindly chase after profit".

China's State Administration of Foreign Exchange is examining how Anbang Insurance Group, Wanda Group, Fosun International, HNA Group and the Chinese owner of AC Milan soccer club used their domestic assets as collateral to get loans overseas, Bloomberg reported on Wednesday, citing unnamed sources.

Morgan Stanley said overseas property investment is the largest and fastest growing sector on the negative list, accounting for 6.3 per cent of China's outbound direct investment in 2016, larger than the combined share of the remaining four sectors on the negative list.

Analysts said property-related outbound direct investment was little affected in the second half of 2016 when most Chinese companies had offshore subsidiaries and funding channels that were beyond the scrutiny of the Chinese government. But with ever tighter regulation, the situation is changing as offshore Chinese banks are required to curb loans to these subsidiaries, and there are higher penalties for parent companies not reporting deals conducted by offshore subsidiaries.

〈The Standard, August 4, 2017〉Despite increases in interest rates, there won't be any bursting of a property bubble in Hong Kong, it said.

It said it expects the US Federal Reserve to raise interest rates only once the rest of this year. It added it expects transactions in the first-hand market to rise, prompting developers to adjust prices.

HSBC also sees deals in the secondary home market resuming a double-digit rate of increase. Meanwhile, Bloomberg said tiny flats are flooding Hong Kong as developers rush to target first-time buyers, struggling to get into the world's priciest market. Inventories of new flats smaller than 431 square feet rose to about 1,400 at the end of June, said Centaline Property Agency.

Wong Leung-sing, an associate director of research at Centaline, said the number may rise to about 2,000 by year end, the highest in data that started in 2014.

The data include flats yet to be completed. The wave of smaller flats reflects the price surge that has put bigger homes beyond the reach of many buyers and triggered warnings from analysts and officials that the city is at risk of a property crash.

Financial Secretary Paul Chan has warned of a "dangerous situation" after repeated efforts to cool the market. Developers built 2,346 pint-sized flats in the first five months of 2017, or 60 percent of last year's total.

Annual construction of small apartments surged by over 500 percent from 2011 to 2016, government data show.

While developers can cut prices to clear inventory as needed, some analysts fear buyers could end up with units they can't resell.

"It could be dangerous when these small flats are unleashed on to the second-hand market after the demand is filled up in the next three to five years," Bocom International Holdings analyst Alfred Lau said.

〈Shanghai Daily, August 3, 2017〉THE Asia Pacific region will lead an unprecedented office building boom globally over the next three years with nearly 60 percent of the world’s new offices being built in the region between 2017 and 2019, major international real estate consultancy Cushman & Wakefield said in its latest report.

More than 65 million square meters of new office space will be delivered during the period, the report says, which is the equivalent of recreating five cities’ worth of office inventory that covers Washington DC, Dallas, London, Singapore and Shanghai.

Within the region, new supply will be concentrated in Beijing, Shenzhen, Shanghai, Manila and Bangalore. These five cities will account for 55 percent of overall construction in the Asia Pacific region, more than one-third of the global market.

“Nearly 200 million square feet (18.6 million square meters) of new office supply is expected to enter China’s four Tier-1 cities, Hong Kong and Taiwan over the next three years,” said James Shepherd, managing director of research for Cushman & Wakefield’s China operation. “The new projects will replace existing lower-quality buildings and raise the profile of China’s Grade A office market.”

The average vacancy rate of the six major office markets in China is expected to rise to 17 percent by the end of 2019, while office absorption may total around 133 million square feet during the three-year period through 2019, according to the company.

〈The Standard, August 2, 2017〉Flat prices have reached a "worrying state," and it has now become urgent to tackle the housing shortage, Chief Executive Carrie Lam Cheng Yuet-ngor says. Despite increased housing supply, the government's property price index rose 9.3 percent in the first half of 2017, while the prices of private properties have climbed for the past 15 months, Lam said yesterday.

"In reality, the rise in income cannot catch up with the rise in property prices, so the difficulty in purchasing flats is an issue we have to address immediately," she said. She added that Hong Kong families were spending on average 66.1 percent of household income to pay mortgages in the first quarter, as reflected by the latest Median Mortgage Payment and Loan Repayment to Income Ratio.

And the flats aren't even particularly large, Lam noted. According to government's figures, 98,000 new flats are to be put on the market within the next three to four years. While the SAR doesn't lack land, there is no consensus over its development, Lam said.

To help achieve a consensus, Secretary for Development Michael Wong Wai-lun will establish an expert-led task force this month and start a "grand debate" on housing supply, she added.

Lam hoped the panel will find answers to Hong Kong's housing issue within a year, including locating land sources for development.

Wong said the first meeting could be held next month, and that it will be chaired by a non-official individual. The "grand debate" will begin with different proposals to increase land supply, he said, adding it would be impossible to find a solution that every citizen in Hong Kong will support. Therefore, the debate will outline the pros and cons of each proposal, and test their feasibility.