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Property News Weekly Digest
2018/12/29
〈Asian Post, December 29, 2018〉Hong Kong's private housing land supply has failed to meet the city's 2018 to 2019 target, even with a high number of homes supplied by tenders, a senior government official said yesterday.

"The housing market is going through a correction, but we will not slow land supply due to the home price changes," said Michael Wong, the secretary for development. "We are uncertain whether [the correction]will be short term or long term."

The government will release four residential plots, two in Kai Tak, one on Lantau Island and one in Yuen Long, providing 1,860 units, in the quarter to March. Along with other sources of land, a total of 3,950 units will be developed for the quarter.

For the financial year ending March 31, a land supply equivalent to 13,850 flats will be released, about 23 per cent lower than the target set earlier this year of 18,000.

"The supply of private flats in the city has been maintained at a rather high level," Wong said. "It is very likely the government will assign more plots intended for private homes to public housing use in the future. The more challenging part is at the public housing side, where we have seen a clear shortfall."

In June, the government announced it would reallocate nine government land sites originally earmarked for private housing, including three in Kai Tak and six at the Anderson Road quarry site, to build 10,600 public flats.

Partly as a result of these changes, the total number of private homes to be developed on this year's land supply is 43 per cent lower than the 24,280 units provided in the last financial year.

〈Asian Post, December 28, 2018〉Hong Kong's high rents, it seems, are only for ordinary people. If you are very rich, it could be extremely cheap, not relatively, but in absolute dollar terms.

After years of criticism, the Lands Department has finally released records of short-term leases of public land. There are 5,407 cases, taking up 2,458 hectares. Aren't we supposed to be short of land for housing? In any case, they make for extremely instructive reading.

Among those who rent public land are some of the city's best known tycoons and their children, as well as wealthy politicians. Since the department only publishes the addresses but not personal details, their identities have to be, to some extent, guesswork.

Many lease the land surrounding their already considerable estates to build swimming pools, gardens and children's playgrounds. "Short-term" is a misnomer because some of those leases can be renewed indefinitely, not just for years, but a decade or two.

How much do they pay, you ask? Well, the daughter of a famous tycoon leases 13,700 sq ft of land next to her huge estate for the grand total of HK$31,653 a month, or HK$2.29 per square foot. A former legislator occupies about 10,000 sq ft for a monthly sum of HK$29,511, or HK$2.77 per square foot.

Now there are inevitably government lands that are left idle, so why not lease them if there are takers and receive a steady revenue stream for the public coffers? And of course, not all such lands are leased to wealthy people. Still, many cases seem to involve people and families who don't need the land but can afford to rent them for pleasure.

〈Taipei Times, December 27, 2018〉A foreign consortium led by a Hong Kong media tycoon won the "Taipei Twin Towers" development project, the Taipei Department of Rapid Transit Systems announced yesterday after five unsuccessful attempts to find a developer.

The consortium of Hong Kong-based Nan Hai Development Ltd (南海發展) and Malaysian property developer Malton Berhad was the most favored applicant for the project next to Taipei Railway Station, the department said, adding that the two sides are to ink a contract in March.

The team offered more generous terms that would allow landlords to keep more floor space and charge higher rents when construction of the mixed-use complex is completed in 2025, it said.

It is the sixth auction attempt for the project, which has been embroiled in bribery scandals for the past 20 years. The consortium is competing against a local group comprised of computer maker Clevo Co (藍天電腦) and affiliate property developer Hongwell Group (宏匯集團).

The local team could take over if Nan Hai pulls out, the department said. Nan Hai is to spend NT$60 billion (US$1.95 billion) on the project that would "wow" the region after its completion, chairman Yu Pun-hoi (于品海) told a news conference in Taipei earlier this month.

〈China Daily, December 26, 2018〉The government has sold its last residential plot of the year at a price 12.7 per cent below its valuation, in a further sign of the city's cooling property market.

Kai Tak Area 4B Site 2, the third plot for sale on the abandoned runway of the former airport, sold for HK$8.03 billion to a unit of China Overseas Land & Investment, according to an announcement by the Lands Department.

The price tag for the site, with an area of 97,393 sq ft and a plot ratio of six times, translates to HK$13,523 per square foot, 12.7 per cent lower than an adjoining parcel that sold on November 14.

Up to 594,087 sq ft of gross floor area may be built on the site in Kowloon East, overlooking Victoria Harbour. Market observers saw the low price as a sign developers were worried Hong Kong's housing market would dip further in 2019.

"The price is a bit disappointing," James Cheung, executive director of Centaline Surveyors, said. He had valued the plot at HK$15,500 per square foot.

"Developers are not as aggressive as they were earlier in the year because the market has softened," Cheung said. Thomas Lam, an executive director at Knight Frank, said builders were worried they might have to offer their completed flats at lower prices in the coming year.

〈The Standard, December 25, 2018〉The secondary property market has yet to see a return to optimism, with the first half of this month wracked by a trend of price cuts and low transaction volumes. However, an expert said, the market is only stuck in the doldrums for the time being because first-hand residential offerings have accounted for most of the buying interest.

Richard Lee, chief executive of Hong Kong Property Services (Agency), said that is being seen with residential developments in East Kowloon with a growing throng of potential buyers viewing the new releases.

Lee added that if asking prices in the secondary market continues to go down, buyers may change their mind. With the ongoing trade war and the holiday atmosphere, buyers will be keeping a prudent eye on the market, he said.

Willy Liu Wai-keung, chief executive of Ricacorp, said most property buyers are hoping to see further drops in prices, hence the reluctance to enter the market.

Liu expects the number of second-hand property transactions to drop 20 percent as developers slash their prices. He also foresees transaction volumes in the first quarter of the coming year to be of the same level as this month.

Statistics gathered from different agencies show second-hand residential properties saw a drop on a monthly adjusted quarter-to-quarter basis. The average square foot price in City One in Sha Tin fell 8.8 percent from HK$17,200 to HK$15,800.