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Property News Weekly Digest
〈The Standard, June 17, 2022〉Sales transactions and prices of some midrange secondhand homes have risen this month, boosted by mortgage insurance relaxation and improved overall market sentiment.

More than 10 transactions at Taikoo Shing in Quarry Bay were completed in the first seven days of this month - a 1-times hike compared with the corresponding period in May, Midland Realty noted.

Gary Fan, a Midland agent, said the robust primary market has driven up the secondary market.

As such, together with mortgage insurance relaxation, the transaction numbers for Taikoo Shing increased.

〈Asian Post, June 16, 2022〉Hong Kong has been ranked the fifth most competitive place in the world by the International Institute for Management Development (IMD), up from seventh last year.

The IMD’s World Competitiveness Yearbook takes into account a host of factors, including government efficiency, business efficiency, economic performance and infrastructure.

In response to the ranking, a spokesman for the SAR government said on Wednesday that: “Hong Kong’s competitiveness is underpinned by our institutional strengths under 'One Country, Two Systems', including the rule of law and judicial independence, free flow of capital, a free trade and investment regime, a simple and low tax system, a favourable business environment and an efficient government.”

"We have every confidence in Hong Kong's long-term economic development and competitiveness," the spokesman added in a statement.

〈The Standard, June 15, 2022〉Rising interest rates in Hong Kong are pushing up costs for homeowners and threatening to drive down prices in the world’s most expensive housing market.

With the Federal Reserve hiking rates aggressively and Hong Kong forced to follow, consumers are being saddled with higher debt, another drag on an economy that’s struggling to rebound. Analysts at Citigroup Inc. and Moody’s Analytics expect demand for home loans to fall, cooling property prices further.

Mortgage rates are linked to the city’s interbank market rate, known as Hibor. For a homeowner with a 30-year mortgage loan of HK$5 million (US$640,000), monthly repayments can rise by 12.8 percent if the Hibor hits 1.2 percent, according to mortgage consultant mReferral Mortgage Brokerage Services.

The one-month Hibor this week climbed to 0.38 percent, the highest since October 2020, while the 12-month rate is at nearly 2.67 percent, close to breaching levels not seen since 2008.

〈China Daily, June 14, 2022〉A state-owned conglomerate warned of caution when acquiring mainland property assets, as they may involve a lot of hidden debt that will incur legal issues.

Everbright Grand China Assets (3699) yesterday said it will consider acquiring high-quality office and commercial projects but will carefully examine the opportunities, as there may be a lot of hidden debts behind the acquisition target after a market correction.

This came as China's new home prices in 70 major cities prices slipped 0.1 percent year-on-year, down for the first time since September 2015, according to Reuters calculations based on National Bureau of Statistics data released yesterday.

That compared with a 0.7 percent gain in April's figures compared to last year.

〈Hong Kong Business, June 13, 2022〉Recovery is on the horizon for Hong Kong's residential market as its sales volume is expected to reach 14,900 in Q2, translating to a 47% QoQ jump, data from Cushman & Wakefield showed.

C&W said the number of deals first two months of Q2 of 10,099 has already exceeded Q1's of 10,056, and in June, transactions are expected to reach 4,800.

Based on the analyst's report, the residential market is being driven by primary sales, particularly for buyers looking for upgrading options. This situation will remain until the second half of the year, according to C&W.

The number of transactions in the primary market increased nearly six-fold m-o-m from 258 deals in April to 1,492 deals in May. The secondary market transactions also performed well and reached 4,700 deals in May.