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Real Estate Situation

Hong Kong falls as the stock and property market break completely


Damon Ho

23rd September 2023

Since the border reopening of Hong Kong and Macau at the beginning of the year, Hong Kong and Macau have begun to embark on the road to normalcy. The Macau government immediately seized the opportunity to attract mainland and Hong Kong tourists to visit Macau again. It immediately offered discounted ferry tickets to Hong Kong tourists to visit Macau, and the results were successful. At the same time, Macau government strengthened cooperation with the Greater Bay Area government and quickly reopened tourist groups to Macau. Macau's visitors rebounded significantly, and gambling revenues naturally increased. By August, gambling revenues had increased to 70% before the border closure.

 Based on the current upward trend in gambling revenues, it is estimated that next year's annual gambling revenue will over the BOP$ 200 billion and it will close to the breakeven point of the government annual fiscal expenditures. In Hong Kong, we do not see any significant changes by the government to attract tourists to come here again. Therefore, the tourism recovery is unsatisfactory. The most awkward thing is that even local Hong Kong people would rather visit Shenzhen to enjoy body massage and taste their local food and beverage. The massive outflow of the consumer power causes the catastrophic effect to local food and beverage industry and entertainment business. 

The Macau government is aware that its strength is gambling business, so it concentrates on establishing the gambling industry to return to normal. Since the initial period of border reopening early of this year, Macau government collaborated with the two ferry companies to offer ticket discounts to attract travelers. In recent months, Macau government has been encouraging the casinos to hire Hong Kong singers to perform concerts in Macau to attract visitors. Additionally, various artists such as Leon Lai, Jacky Cheung, Aaron Kwok, Eason Chan, and Kelly Chan have been performing concerts in different Macau casinos' showing arena.

 If the Hong Kong government has the foresight to take the lead to invite these Hong Kong stars to open concerts in Hong Kong, I believe these singers will be reluctant to give priority to Hong Kong. Nonetheless, Hong Kong government did not utilize this competitive advantage to boost the tourism. Government related departments only asked Hong Kong people to have drinks in bars and taste skewered meats in Japanese restaurants to increase consumption. Consequently, there were few responses. Every Saturday and Sunday, Hong Kong residents flock to Shenzhen to enjoy low-priced catering services, while the other Hong Kong residents go to Macau to watch Hong Kong star shows in Gambling showing areas and play the gambling games. Hong Kong government was not expecting to promote local tourism. Finally, Hong Kong night does not shine again as it was the Pearl of the Orient.

Hong Kong stocks exchange's daily trading volumes in the first eight months of this year were 112 billion, down 16.5% from last year's average daily income of the same month. In viewing of property market, the total number of first and second-hand transactions in August was 3,247, down 21% from 4,137 in the same month of last year. If it compares to 5,844 cases in 2021, it dropped 44%. The China government had reduced stamp duties to save the stock market. In addition, it also relaxed lending policies, and encouraged citizens to buy properties to save the property market. 

 The Hong Kong government had no policy to save the stock market, and it also stated that it was not the right time to cancel spicy measures against the property market. Besides, the average middle-class family suffered a loss of three million due to the downward Hang Seng indexes and reducing property prices. The Hong Kong government did not follow the example of Macau in strengthening its crash cow’s industry, nor did it follow the national policy to rescue stocks market by reducing the stamp duty and loosened the mortgage policies to save the property market. Indeed, it would not save weakness stocks and properties markets by a simple slogan of “Night Vibes of Hong Kong.” It is too simple and naive, and the market goes the opposite direction as government desires it to go. Anyone who loves Hong Kong should think twice. The day of Hong Kong's real estate and stocks market break completely, that is the same day of Hong Kong falls. 

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1. Steps save Hk economy 2023-09-23 14:06:41

Despite facing multiple challenges locally and globally, PwC believes Hong Kong will still be able to boost its overall competitiveness, shifting its path from resilience to resurgence. 

The first step to its path to resurgence is by cementing its status as an international financial centre which it can do by strengthening its collaboration with global stock exchanges, especially those in the Middle East and Southeast Asia, through exploring dual listing opportunities.

“This can enhance the attractiveness of listing in Hong Kong as dual listing has the advantage of expanding the geographical base of investors and issuers,” Eddie Wong, PwC Hong Kong Capital Markets Services Partner, said.

Wong also recommended the implementation of the Primary Equity Connect (PEC) initiative “as it holds significant potential to enhance connectivity and promote companies to list in Hong Kong 

2. Singapore is world's freest economy 2023-09-23 17:04:19
  • Singapore has dethroned Hong Kong to become the world's freest economy, according to a report released by Canadian think tank Fraser Institute.
  • For the first time since the Economic Freedom of the World Index started in 1970, Hong Kong has slipped from its number one position to second place — and its score is about to drop even further.
3. HKMA retained its base rate at 5.75% 2023-09-24 13:27:13

The Hong Kong Monetary Authority (HKMA) has retained its base rate at 5.75% in response to the US Fed’s decision to keep its target range for the federal funds rate unchanged at 5.25%-5.5%.

“The policy decision this time is generally in line with market expectations.  The Fed stressed that its future interest rate decisions would continue to be dependent on the latest economic data and the impact of continual rate hikes during the past year on the economy,” the central bank said.

“It is therefore premature to conclude whether the US rate hike cycle has been completed, and the high-interest rate environment is likely to last for some time,” it added.

HKMA, meanwhile, warned that Hong Kong dollar interbank rates might remain high for some time and advised the public to “carefully assess and manage the relevant risks when making a property purchase, mortgage or other borrowing decisions.”

4. 甲厦觀塘絲寶國際21樓尺價1.3萬沽 2023-09-24 13:33:16



6. Luxury homes bear brunt of losses 2023-09-25 09:26:00

Interest rate hikes and sales launches for new builds have dragged down the secondary market, with many potential buyers turning cautious and homeowners rushing to sell - even if it comes at a loss.

Twenty housing estates saw 63 units sold off at lower prices, with the losses ranging from HK$866,000 to HK$8.96 million, or a 9.8 to 30.1 percent decrease.

Of these, luxury units were particularly hit hard.

A four-bedroom unit on a high floor that came with a storage room and sea views at The Graces in Tai Po went for HK$40 million, or HK$18,315 per square foot, which was lower than the asking price of HK$43 million, according to Ricacorp Properties.

7. Supply builds up in primary market 2023-09-26 10:06:12

More than 1,360 residential units were approved for presale in the primary market last month, bringing the total to over 16,000 units that have been approved for sale but not yet officially listed for sale in the market.

Kai Tak has the lion's share of units, surpassing 8,200, which constitutes 60 percent of the total.

The bulk of the rest are in Tuen Mun and Yuen Long with approximately 3,300 units and 2,000 units respectively.

Currently, there are seven new projects in Kai Tak that have been approved for sale but have not yet been officially listed.

8. Valuation hits by priminary lows 2023-09-27 11:08:56

Low prices for newly built homes and interest rate hikes sent bank valuations for flats at 17 blue-chip housing estates down by up to 4.6 percent last month.

Those 17, out of 20 estates tracked, were two more than the 15 that saw declines in July, with the falls coming in a wide range from 0.5 to 4.6 percent, according to Hang Seng Bank's online valuation platform.

Only one estate saw bank valuations rise, and that was by 2.89 percent, while the remaining two stayed unchanged.

One unit at Amoy Gardens in Ngau Tau Kok saw the largest drop in valuation, slipping by 4.62 percent to HK$4.96 million, or HK$13,299 per square foot.

9. HK export index fell 7.3 points to 40.5 2023-09-28 11:45:10

The Hong Kong Trade Development Council export index fell 7.3 points to 40.5 in the third quarter of 2023 as the council attributed the fall to weak global demand, in line with weakness in exports across the region. 

The council also revised its forecast for Hong Kong’s export growth this year to between -7 percent and -9 percent. 

The latest index was recorded from the council’s quarterly survey of 500 exporters from six major industries, including clothing, electronics, jewelry, machinery, timepieces and toys. The index above 50 indicates an optimistic outlook and below 50 as pessimistic.