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Property News Weekly Digest
2019/4/23
〈China Daily, April 20, 2019〉Hong Kong's largest developer by market value sold just six of 113 flats on offer at its Park Yoho Napoli project in Yuen Long yesterday, the worst for any property firm since late November when only two of 27 units were sold at Jiayuan International Group and Stan Group's T Plus micro-flat project in Tuen Mun.

Market watchers said the poor sales reflected prospective buyers' wait-and-see attitude as a plentiful supply of small flats would be released in the next few months.

SHKP's move to release the flats for open sale comes two weeks after the Real Estate Developers Association instructed its members to make available 20 per cent of flats in new projects in this particular category.

Developers have been criticised for increasingly selling new flats through tender, a marketing tactic that puts buyers at a disadvantage.

"The units sold cost between HK$4 million and HK$7 million," said Sammy Po Siu-ming, chief executive at Midland Realty's residential department. "Flats priced any higher will take longer to sell."

Some 70 per cent of the 369 flats in seven projects that go on sale during the four-day holiday are being sold on the open market.

Po said open sales provided more transparency, but its effect on buyers at this time remained to be seen.Yesterday, sales at Park Yoho Napoli started at 10am in the project's shopping centre, Park Circle, on a first-come, first-served basis.

〈Asian Post, April 20, 2019〉Smaller and mediumsized real estate agencies are continuously losing ground and are under pressure for survival as large agencies keep expanding, according to industry experts.

Amid the churn, there have also been some welcome instances of big companies lending a helping hand to the small and mediumsized firms. Hong Kongbased Centaline Group, a leading Chinese property agency, has set up Yuancui Information Technology, a platform that helps small and mediumsized property agencies to leverage on its extensive resources for further business development.

“Yuancui will provide mediumand smallsized agencies with a more flexible development mode wherein they can use our solutions to overcome the obstacles related to size and scale. Our range of flexible solutions enables companies to retain their unique market approach without any necessity to be part of the platform,” said Shih Wing Ching, founder of Centaline Group.

According to Shih, small and mediumsized companies can use Centaline’s extensive domain knowledge, technologies and resources to develop growth and customer retention strategies for various markets.

Shih’s statements strike a chord as a recent report from Shenzhenbased Qianzhan Industry Research Institute, a consultancy firm, indicates that the overall market share of the nation’s top 10 realty agencies is set to reach 17.53 percent in 2018 from 17.08 percent in 2017.

“In the real estate sector, small and mediumsized agencies are struggling for survival. Most of them are facing huge challenges such as limited resources, outdated management style and shortage of talents,” said Zeng Xi, cofounder and president of Shenzhen Fangdd Network Technology Co Ltd, the nation’s largest online property trading service platform founded in 2011.

〈The Standard, April 18, 2019〉The planning department has found that more commercial organizations are setting up shop in Kowloon East, with rents continuing to surge since the government launched its energizing Kowloon East plan in the 2012 policy address.

The scheme aimed to transform the area - comprising the site of the former airport as well as the Kwun Tong and Kowloon Bay business areas - from a manufacturing hub to the SAR's next central business district.

Judging by the department's Kowloon East 2018 report, the plan has bore fruit, as the proportion of businesses located in office buildings doubled from 11 percent in 2011 to 22 percent last year.

The research also noted that firms in banking and financial services, insurance, real estate, and business services soared from 6 percent of total offices in 2011 to 19 percent.

CitiBank and Manulife Financial bought the east and west towers of One Bay East in Ngau Tau Kok for HK$5.43 billion and HK$4.5 billion in 2014 - the highest price for an office building at the time.

Separately, the trade and industry department shifted its offices to Kai Tak from Mong Kok in 2015.

Meanwhile, Link REIT (0823) and Nan Fung Development's joint venture, The Quayside in Kwun Tong, with nearly 900,000 sq ft of space, is expected to open this year, with JPMorgan leasing at least four floors in the building.

In 2017, Nan Fung also bought a plot in Kai Tak area 1F site 2, with a maximum gross floor area of some 1.9 million sq ft, for HK$24.6 billion - the highest priced commercial land in Hong Kong.

The government is inviting tenders for Kai Tak area 4C site 4, with bids closing May 10 for the commercial plot.

Strong demand is continuing to drive office rents up in Kowloon East. The Planning Department has found that small units rented for between HK$5,000 and HK$10,000 monthly fell from 25 percent of total offices in the district in 2011 to 16 percent in 2018.

〈Asian Post, April 17, 2019〉Think tank warns of looming crisis as construction slows and suggests the government prioritise rezoning of 25 sites to build public and private flats

Public and private supply of flats in the city will plunge in the next three to four years off what a think tank has described as a "housing supply cliff", as new construction has been hampered by delays and a lack of available land.

To alleviate the city's housing shortage, the Our Hong Kong Foundation suggested that the government should prioritise and rezone 25 sites for the building of flats, develop brownfield sites and private rural land in the New Territories and reclamation to expedite supply.

An annual average of 18,500 private flats will be completed between this year and 2023, an 11 per cent drop on last year's estimate, according to the foundation set up by former chief executive Tung Chee-hwa.

But the think tank warned that the five-year drop in supply by 2023 would be almost 40 per cent, with only 13,300 flats coming on the market that year.

The think tank based its findings on stocktaking figures from each private developers' current projects.

The foundation's head of land and housing research, Ryan Ip Man-ki, said: "We are running out of available land. It is not a coincidence that both private and public housing supply is going to [drop off] a 'housing cliff' in three to four years."

One of the reasons the foundation lowered its estimate was the government's announcement last year that it would increase the proportion of new public housing to account for 70 per cent of the supply target.

By adjusting the public- private ratio of its housing supply target from 60:40 - which had been adopted in 2014 - the government also reallocated for public housing nine sites that were originally intended for private homes.

〈The Standard, April 17, 2019〉Seven in every 100 people in Hong Kong are multimillionaires and more than half of them think flat prices will soon fall.

The finding is by Citibank Hong Kong, which points to the number of multimillionaires with total net assets of over HK$10 million reaching a record high of 511,000. Among them, 69,000 hold liquid assets over HK$10 million.

And the average net assets of multimillionaires is HK$16.3 million, according to the survey of 4,912 people interviewed from October to March.

Citibank consumer business manager Lawrence Lam Chi-kong said the number of multimillionaires has been increasing for some years and he does not see any reason why that trend should change.

The research found that 9 percent of male and 21 percent of female multimillionaires are single. The average age for males is 58 while for females it is 60.

Multimillionaires own an average of 1.9 properties in Hong Kong, 0.6 in the mainland and 0.7 overseas.

Twenty-two percent of multimillionaires also bought a property in Hong Kong in the past five years, with 44 percent of them doing so for their own use while for 56 percent it was for investment.

For the future, 56 percent think property prices will drop within the next 12 months. That comes after 33 percent predicted a fall in 2017. Twenty-seven percent think there will be an increase and 16 percent see no change.

Lam said the pessimistic view may be caused by a weak stock market performance late last year and the Sino-US trade war. Citibank's own prediction is for a 5 percent rise in property prices this year.