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Property News Weekly Digest
〈Hong Kong Business, July 1, 2022〉Whilst Hong Kong’s role as an offshore financial centre–described as the "cornerstone of Hong Kong’s economy"–remains competitive, it is being challenged by a triple whammy of issues.

“All in all, we are confident that Hong Kong will still be able to attract capital as the Chinese economy and its financial system continue to increase their size relative to the rest of the world,” Natixis Asia Research wrote in a report. “But the real question is whether Hong Kong can keep its relative importance as an intermediator under the evolving global trend.”

The COVID-19 pandemic, geopolitical tensions worldwide, and lingering effects of the social unrest from 2019-2020 are all challenging its role as a financial centre.

Currently, Hong Kong reportedly remains influential in channelling foreign direct investment (FDI) into the Asia Pacific (APAC), with a market share rising from 40% in 2015-2019 to 46% in 2020.

〈The Standard, June 30, 2022〉 Tomorrow is the 25th anniversary of the handover but the problems of housing, land-use planning and property prices have persisted since 1997.
Imbalanced private-to-public housing ratios have led to a surge in prices of flats built by developers, while low interest rates are a second reason for that disproportionate increase.

Prices for private properties ratcheted up in recent years as the ratio between public and private housing widened to 7:3 from 6:4.

Since the SAR administration announced its long-term housing strategy in 2014 - in which it outlined the need to build more public housing units and ensure the sustainable use of existing resources - supply of private housing has slumped.

〈Hong Kong Business, June 29, 2022〉More firms in Hong Kong, especially start-up companies, started enforcing hybrid setups in 2021, which led to an increase in smaller office spaces.

Instant Group, in its annual Hong Kong Flexible Market Review, found that demand for desk spaces for three to nine people went up by 29% last year compared to pre-pandemic levels.

In contrast, demand for larger space requirements, or those with more than 25 desk spaces, fell by 46% in 2021 compared to 2019.

“Businesses are continuing to rethink their real estate strategies in response to the dynamic nature of the market, especially hybrid working,” said The Instant Group.

〈 Reuters, June 28, 2022〉Goldman Sachs said Hong Kong residential property prices could drop as much as 20% through 2025, hurt by a drag on household income and homebuyer demand caused by the latest wave of the COVID-19 outbreak and a rise in interbank rates.

The investment bank lowered the price forecasts for 2022 and 2025 to a drop of 5% each year, from previous forecasts of flat for both years. For 2023 and 2024, it maintained its prediction of a 5% drop.

〈Business Times, June 27, 2022〉 CHINESE developers desperate to offload unsold homes are resorting to "fancy" ways to lower prices, seemingly circumventing rules against excessive discounting, a government-backed newspaper reported on Thursday (Jun 30).

Developers in some small cities have offered to accept food including wheat, garlic, watermelons and peaches as down-payment substitutes, reducing the amount of cash buyers need upfront and effectively making properties cheaper.

"Some real estate companies have rolled out unique ways to help boost sales, with fancy promotions like swapping melons and fruit for homes raising suspicion over whether they are trying to bypass curbs on price cuts," digital news outlet The Paper reported.

This week, one developer said buyers can use watermelons to offset as much as 100,000 yuan (S$20,784) for an apartment in Nanjing in eastern Jiangsu province, The Paper reported. The promotion is currently on hold, it said, citing a salesperson.

In Wuxi, also in Jiangsu, a developer this week said buyers can use peaches to offset as much as 188,888 yuan in payment.