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Property News Weekly Digest
2018/10/6
〈Asian Post, October 6, 2018〉A second developer has lowered the price of new flats in Hong Kong as a toxic combination of rising interest rates, a struggling stock market and the fallout from the US-China trade war dampen demand in the world's most expensive property market.

Nan Fung Development has priced the latest batch of 242 flats at its LP6 development in Lohas Park, Tseung Kwan O, at an average of HK$16,006 per square foot after discounts of 19.5 per cent.

That was 1.7 per cent lower than the launch price a week ago, the developer said yesterday. The price incentive comes even though Nan Fung has sold 1,422 flats at LP6 for more than HK$10 billion since early last month. The project has 2,392 flats.

"It is unusual but it is probably because the market sentiment continues to deteriorate. It would not be a surprise to see prices fall 10 per cent within one or two months," said Raymond Cheng, the head of Hong Kong and China research and property at CGS-CIMB Securities.

"The market is obviously entering a buyers' market and developers dare not set high prices for new flats. If the sales response is poor, it will have a devastating impact on market sentiment."

Nan Fung's price cut comes as the city's stocks suffered their biggest weekly loss in eight months, sliding for a fourth day.

〈The Standard, October 5, 2018〉BOC Hong Kong (2388) and CMB Wing Lung Bank are offering rebates of up to 2 percent of the loan value for new-home mortgages, the Hong Kong Economic Times reported yesterday, citing unidentified sources.

The report also said that Citigroup is said to have lowered the cap for its Hibor-linked mortgage rate by 10 basis points.

Citigroup said it wouldn't comment on market rumors while BOC and CMB Wing Lung Bank didn't immediately respond to requests for comments.

The best lending rate uplift for the first time in more than 12 years has put an end to an era of best low-rates, spiraling property price and the most expensive city to own an apartment.

Developers too are offering additional treatment and hefty discounts to entice buyers.
Lai Sun Development (0488) has cut the price of some units at its Monti project by 10 percent and is giving buyers furniture vouchers worth as much as HK$120,000 ($15,300).

Vanke Property (Hong Kong), the local arm of China Vanke, is offering buyers at its Le Pont development in the New Territories mortgages between 10 basis points to 20 basis points below market rates, and cash rebates of as much as 1.95 percent of the mortgage amount.

Meanwhile, Kowloon Development (0034) has priced the first batch of 130 flats at One East Coast in Yau Tong at an average-per-square-foot price of HK$$22,308 or HK$19,913 after discounts, which is still the highest in the district.


〈Asian Post, October 4, 2018〉Young buyers eager to get on the property ladder in Hong Kong can heave a sigh of relief as more flats priced under HK$4 million are coming on the market.

Kowloon Development yesterday released the price list for 130 of its 646-flat One East Coast residential project in Yau Tong. And 10 of the flats carry a price tag below HK$4 million.

The 130 flats range in size from 201 sq ft to 374 sq ft and are priced between HK$3.9 million and HK$7.7 million, with the average price working out at HK$19,913 per square foot after discounts. The flats open for subscription tomorrow.

"This is the lowest price in recent months and the developer is using such attractive pricing to lure buyers," said Louis Chan, the vice-chairman and chief executive of residential division for Asia-Pacific at Centaline Property Agency.

New home prices in Kowloon now stand at an average of more than HK$20,000 per square foot, Chan said.

The last sale of a flat under HK$4 million in the area was in July when a 443 sq ft former public housing unit at the 30-year-old Tak Tin Estate went for HK$3.9 million, according to data.

Derek Chan, the head of research at Ricacorp Properties, said buyers had waited for a long time to see flats priced below HK$4 million. "Most new flats coming on the market start from HK$6 million," he said.

〈China Daily, October 4, 2018〉Hong Kong’s private housing is now infamous for its diminutive flats, regularly crammed to the ceiling and commanding exorbitant prices to rent or own.

The scarcity of land available for development has also driven up rents for shops, offices, and even car parking spaces. Property prices in terms of square footage rank among the highest, if not at the top, of world cities and affect the cost of living and doing business.

New land does not emerge from the clouds, hence any practical hope for a sufficient land reserve that Hong Kong badly needs lies in creating land from the surrounding waters.

Yet opponents to land reclamation and related large-scale infrastructure projects necessary for housing development dismiss it as unjustified in terms of actual need, a threat to the environment, and a waste of public money. A handful of legislative councilors have continued to oppose approval of funding for large-scale planning and feasibility studies to find solutions to the land and housing problems.

Opponents to reclamation proposals have also criticized massive reclamation as going against the objective of sustainable development. What is missing from their narrative is that sustainable development rests on meeting society’s needs.

The younger generation can be forgiven for not knowing a significant amount of our existing infrastructure stands on reclaimed land. Everything which is vital to Hong Kong, from hospitals to schools and public housing estates as well as railroads and highways, offices and recreational spaces and the airport, would not exist today without land reclamation.

〈Asian Post, October 3, 2018〉Spooked by the prospect of rising interest rates, a slowing economy and a mounting supply of new apartments, Hong Kong developers are going all out to woo buyers, offering bigger loans, longer repayment periods and even discounts for school tuition.

China Vanke launched the sale of its Le Pont project in Tuen Mun with a loan-to-value ratio of up to 80 percent, according to its sales documents.

The first batch of 347 flats were snapped up last weekend despite a rise in prime rates.

To further sweeten the offer, the developer is also offering a 20 percent discount on tuition fees for a buyer's child for one year in a neighborhood pre-school.

Also on offer are Adidas cash coupons worth HK$2,000 for each unit purchased.

Quincy Chow, vice-president of the operations department for sales and marketing at Vanke, said the company's products and different financial benefits had been well received and resulted in an increased number of visits by prospective buyers.

Others are extending the interest-free repayment period to three years, after which the buyer will have to pay rates that are sharply higher than prevailing mortgage rates, according to sales documents and property agents.

Mortgage loans provided by the arms of developers accounted for 17.4 percent of the total presale home market in the second quarter of this year, said Sharmaine Lau, chief vice-president at mReferral Mortgage Brokerage Services.