(Asian Post, November 25, 2017) As Hong Kong's crazy property market continues with its gravity-defying surge, aspiring homeowners can only look on in frustration and despair. The news headlines have, once again, reaffirmed the city's dubious distinction of having the world's most expensive real estate market. The government's latest tightening of rules on mortgage lending, on the heels of previous "spicy" measures, has had little effect. They only underscore the huge challenges facing Chief Executive Carrie Lam Cheng Yuet-ngor, who has made affordable housing and home ownership her central policy goals.

A pair of flats at exclusive Mount Nicholson just sold for a combined HK$1.16 billion. At HK$131,500, that makes them by far Asia's most expensive residences by square footage.

Many rich people, in Hong Kong and the mainland, are made even richer by an overly generous equities market. The Hang Seng Index has breached the 30,000 mark, its highest since the outbreak of the global financial crisis almost a decade ago. Historically, the property and stock markets reinforce each other in Hong Kong. So this may be a sign of the times, and a warning of danger ahead.

Down at the grass roots, 88,000 families are competing for 620 newly released subsidised homes, a record of 141 applicants fighting over every flat. The next batch of such flats under the Housing Society will not become available for another three years.

While the private market becomes more and more unaffordable, discounted government-built flats are not being released fast enough to meet bottled-up demand. In her maiden policy address, Lam pledged to create a Starter Homes scheme to increase home ownership for first-time buyers. It's not clear, though, how she plans to fulfil her ambitious goal of raising the ownership rate from the current 50 per cent to 70 per cent. This will require shifting emphasis from rental property to home purchase at a time when private flats are unaffordable and subsidised ones are unavailable.

(China Daily, November 24, 2017) Amazon — the world’s largest e-commerce company by capitalization — is trying to make inroads into the traditional brick-and-mortar retail business by gobbling US grocery chain Whole Foods. What has terrified traditional retailers most is that Amazon has found ways to cut Whole Foods’ prices.Amazon has set an example for another e-commerce giant Alibaba, which is reported to have made billion-dollar investments to forge strategic partnerships with Auchan Retail of France and Taiwan’s Ruentex Group. The move was hailed by the South China Morning Post, which is owned by Alibaba, as a “new retail initiative that combines the strengths of online shopping with those of physical retail stores”.

It’s widely expected that such a “combination” trend will spread to Hong Kong where e-commerce is rapidly gaining popularity among young shoppers who don’t find the pleasure of browsing through the isles of department stores and supermarkets.

So far, e-commerce in Hong Kong is driven by the traditional retailers and supermarkets. But, in recent years, more and more dedicated e-commerce platforms that sell a wide range of computers, consumer electronics and home appliances have been set up to woo internet-savvy customers.To be sure, they have yet to pose a credible challenge to the traditional retailers. But, even in this compact city where supermarkets are within walking distance in many neighborhoods, the disruptive effect of e-commerce is beginning to be felt.

In the US, for instance, closures of physical retail chains have become a common occurrence in many states. But, a few of them, particularly Walmart, Cosco and Best Buy, seem to have found a way to keep the onslaught of e-commerce at bay by adopting rigorous cost control programs to keep merchandise prices down.In so doing, they have set an example for retailers elsewhere, particularly Hong Kong, where high property prices have made it all the more important for physical stores to control their overheads. Whether they like it or not, Hong Kong retailers, other than those who cater mainly to the free-spending mainland tourists, will have to brace themselves for the intensifying price war.

(The Standard, November 23, 2017) A buyer has forfeited a HK$1 million deposit for a two-room unit at One Kai Tak, a project of China Overseas (0688), which is going to put more housing projects on the market next year.

The transaction record shows the low-floor unit with a sellable floor area of 547 square feet was sold for HK$10.99 million in August when the buyer paid a 10 percent deposit. However, the buyer was not able to pay the rest within 60 days, so the apartment was taken back by the developer.

China Overseas has increased the housing price by 2 percent. Its managing director also expects housing prices to grow by 5 percent next year.

The company is to open developments in Lai Chee Shan and Fei Ngo Shan Road for sale next year. The Lai Chee Shan project will provide 1,500 apartments, offering one-room units to four-room units, while Fei Ngo Shan Road will have five houses with a sellable area of 3,000 sq ft to 4,000 sq ft.

Meanwhile, Wheelock Properties plans to raise prices by 5 percent for the latest batch of its Oasis Kai Tak, which has fewer than 20 units for sale; 289 units of the project have been sold for HK$2.7 billion.

The developer has seen HK$15 billion from all property sales. It will offer One Homantin soon, with another project to come at Lohas Park.

Wheelock executive director Ricky Wong said he is positive on development of super luxurious houses. By the end of this month, K&K Property will also put more units at Victoria Skye on sale via tenders.

(Economic Post, November 22, 2017) The government may be the only group in Hong Kong that is happy to pay high rents. As if the current market is not frothy enough, the Government Property Agency, which is responsible for finding and negotiating private leases for various departments, has been more than willing to pay 40 to 70 per cent more than similar leases in the same districts.

So much for the government's efforts to calm the property market. After all, it's not its money.

According to the government auditor, 35 per cent of 170 leases it examined cost more than the going rate. In six instances, it was more than 40 per cent above the market rate.

It sounds almost systemic in the way the agency chooses to pay more than necessary.

In one particularly egregious case, the Civil Engineering and Development Department started off paying for a 12,000 sq ft office in Kwun Tong in 2003 at HK$79,000 a month, but ended up forking out HK$551,000 by 2015. At HK$47 per square foot, it could rent the same type of office at a prime location in Tsim Sha Tsui with money to spare.

There was no record that the agency had looked for cheaper options for the department.

In another case, the Social Welfare Department rented a 56,000 sq ft Grade A office in Kowloon Bay at HK$1.4 million a month - to store files and records. Why did the department need a top-grade office for storage? It is one of life's great mysteries.

Earlier this year, the Labour Department had been paying rent for two offices in Quarry Bay for a combined rent of HK$1.4 million. But both were left empty because it had delayed moving into one, while the agency neglected telling other departments that they could use the other.

It's not all the fault of the agency head, Tommy Yuen Man-chung, a career civil servant. He took over the post only in December 2015, so some of the problems were inherited.

But there is no indication that he tried to launch a value-for-money reform until now, after the auditor has exposed his agency.

(The Standard, November 22, 2017) The Estate Agents Authority will issue guidelines to property agents about selling flats in foreign countries by the end of next month, Secretary for Transport and Housing Frank Chan Fan said.

However, Chan admitted regulating agents will be difficult due to differences in law and taxation in foreign nations.At yesterday's Legislative Council meeting, legislator Ben Chan Han-pan said a few citizens sought his help as they had bought flats from a UK developer through a registered agent at a property fair in 2015. However, with all the flats failing to be completed, Chan said "over 200 Hong Kong people have suffered financial losses totaling hundreds of millions of Hong Kong dollars."

He asked the housing chief to review the relevant policy with a view to establish a mechanism to enhance the protection for Hong Kong buyers.Frank Chan said the police had received 35 reports from citizens regarding the case the lawmaker mentioned and the police's Commercial Crime Bureau is leading the investigation.

He also said that alerting buyers about the risks of purchasing overseas flats is necessary. The EAA has been reminding agents to be vigilant and not to mislead buyers, he said."The EAA is preparing for a guideline issued by the end of this year to remind estate agents things to notice in selling incomplete buildings overseas."

But he played down the seriousness of the issue, saying the EAA and Consumer Council both received only 10 cases annually from 2014 to 2016 about overseas flats.Legislator Jeremy Tam Man-ho asked Frank Chan whether agents need to be licensed if they sell foreign flats. He replied that agents who only sell property abroad do not need a license.