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Real Estate Situation

Property market deserves to rebound


Damon Ho

26th November 2022

The pessimistic mood about of the property market is widely spread over the industry. The viewpoint is so overwhelming that is strong enough to shake the most optimistic commentors’ belief. Things will go the opposite direction while the public consistently holds the same standpoint for a long time.

Until recently, the Dow Jones has been raised five thousand points in the past two months.

The sudden surge surprised the market and ignited the confidences over the Hong Kong stock market. The stock and property market are corelated each other. It is reasonable to expect that the property market will benefit by the sentiment improved.

The reason of rebound of Dow Jones and Hang Seng index is not specific. The Dow’s surge was due the inflation rate which was less than the market prediction. The Hang Seng index hiking was because the border quarantine time was shortened to two days. In fact, the basic economy factor is unchanged.

The negative factors of the property market have several reasons but the interest rate, economic downturn and the mass migration draws the most attention. The property price continues to adjust down for more than a year. But it should point out that the rental is not reduced along with the price. As a result, the yield return has risen to a reasonable level of 3% or more.

The performance of the stock market may not to stimulate the property price to rise at once, but it is somehow to improve the trading sentiment of property market. The public also hope the property market will duplicate the sudden rebound of the stock market.

The second quarter of 2008, the world economy suffered the financial tsunami and the property price plunged 30% within half year. Until early of 2009, there was a new first-hand property which was opened to sell in Yuen Long. In consequence, it drew thousands of buyers to snap up all the units. Finally, the property market rebounded from then on. Does this history happen again? It needs time to tell.

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1. 恒地中環地王申建3幢物業 2022-11-26 15:11:36

2. 沽空港元是聰明彩票 2022-11-26 15:34:15
繼美國著名對沖基金經理阿克曼(Bill Ackman)表示正在沽空港元之後,再有外資大戶表示沽空港元。外媒引述華爾街星級交易員Saba Capital Management創始人溫斯坦(Boaz Weinstein)稱,他和阿克曼一樣,都在沽空港元,形容這交易如同一張「聰明的彩票」,不過,並未透露沽空規模。

3. Seven Hotels repurposed to residential properties 2022-11-26 23:32:26

Some hoteliers have transitioned toward redeveloping their establishments into residential properties with the heavy toll inflicted on the financial hub's tourism and hotel industry by the stringent border restrictions between the mainland and Hong Kong.

There have been at least seven hotel projects with about 4,823 units that have been repurposed into residential properties since 2020 - some of which have been successfully approved by the Town Planning Board - according to The Standard's sister publication Sing Tao Daily.

Three of them belong to Li Ka-shing's CK Asset Holdings (1113), involving about 3,363 units.

One of the three is the Tin Shui Wai-based Harbour Plaza Resort City, which submitted a new development proposal in June to convert the building to 1,102 residential units.

5. 美國第五街取代香港成最貴租商舖 2022-11-28 16:00:02

The global political conflicts and closure of borders impacted Hong Kong’s top spot in the priciest retail destination. According to Cushman and Wakefield’s 2022 report, Hong Kong has now edged down to second place. 

The Upper Fifth Avenue located in New York ranked first in the most expensive retail destination report, with $15,622 (US$ 2,000) per square foot (sq ft). In 2019, the US was at the second spot globally.

Hong Kong’s Tsim Sha Tsui has $11,216 (US$1,436) per sq ft. The market was in first place before the pandemic hit.

Followed by Hong Kong in the most expensive retail destination is Italy’s Via Montenapoleone with $10,779 (US$1,380)  rent per sq ft. London’s New Bond Street and The Avenues des Champs Elysees in Paris placed fourth and fifth, respectively.

6. central bank new measures boosted stock price 2022-11-28 19:38:22

Last week, property developer stocks surged after news the central bank and banking regulator issued measures that encouraged banks to help the real estate industry. It comes alongside other support measures earlier this month.

Shares of country Garden the biggest Chinese developer by sales, have more than doubled in November, and those of Longford have surged by about 90%. The stocks have already given back some of this month's gains.

7. Grade A Office rental is falling 2022-11-29 13:08:13

Overall rents in Hong Kong’s Grade-A Office sector fell by 1.4% in October to $71 per square foot compared to the previous month due to the weak market sentiment, according to a report from Knight Frank.

Year-to-date rent declined 6.2%, with the overall rents in Central dipping 1.8% month-on-month (MoM), and in some decentralised markets posting weaker rents such as North Point and Sheung Wan, which were down 2.2% and 2.3% MoM, respectively.

Knight Frank added that flight-to-quality remained the priority for occupiers and leasing demand, with occupiers looking for office quality upgrades at lower rents, particularly in prime locations.

8. China property stock soared 2022-11-30 00:07:57

Chinese property developers' shares and bonds soared on Tuesday after regulators lifted a ban on equity refinancing for listed firms, the latest support measure for a cash-squeezed sector that has been a key pillar of the world's No. 2 economy.

The move will make it easier for developers to obtain fresh funding, analysts said, but reviving demand from homebuyers would remain challenging amid persisting COVID-19 curbs that have triggered rare street protests across many Chinese cities.

9. 外滙基金輸引扒街 2022-11-30 13:10:13
10. Rising Rates hurts economy 2022-12-01 09:33:41

Hong Kong’s residential market was sluggish in October due to continued increases in interest rates, a weakening local economy, and unstable stock market, according to Knight Frank.

In a report, Knight Frank said residential sales in October were down 18.8% month-on-month (MoM), with primary sales declining by 53.2% MoM to 672 homes, citing data from the Land Registry.

“Potential buyers were hesitant to enter the property market, leading to poor performance in both transaction volume and prices,” the report read.

11. Central hospital being killed 2022-12-01 16:55:52

A private hospital in Central, Your Health Specialists Medical, suddenly announced it would close this month after a high-profile opening in February that immediately ran into a market rendered sluggish by the fifth wave of the Covid-19 pandemic.

The hospital, which targets middle-"box-sizing: border-box; margin: 0px 0px 10px; color: rgb(51, 51, 51); font-family: "Helvetica Neue", Helvetica, Arial, sans-serif;">YHSM's signboard was still at 35 Queen's Road Central, Kingston International Centre, late last month but the hospital is no longer in operation and the main entrance has been closed, reported Sing Tao Daily, sister publication of The Standard.

12. Retail market needs border reopening 2022-12-02 17:38:16

The recovery of Hong Kong’s retail market to pre-pandemic levels will take “considerable time” as it has not yet fully reopened its borders to tourists, with retailers relying on local consumption.

In a report, Knight Frank said that with the poor macroeconomic conditions, along with the strict border restriction, it is difficult to identify any upside as this has weakened Hong Kong’s traditional role as the retail hub in the region.

“Looking ahead to 2023, we do not expect significant growth in the local consumption segment, but considering the gradual easing of border restrictions, we expect a rebound in retail sales with returning activity,” it said.