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Property News Weekly Digest
2019/9/7
〈Asian Post, September 7, 2019〉Some property owners in Hong Kong have wasted no time raising asking prices in the wake of the chief executive's attempt to defuse the worst political crisis in the city's history.

After the announcement by Carrie Lam Cheng Yuet-ngor that she would completely withdraw a controversial extradition bill - which had sparked weeks of protests - the prices of six properties listed for sale rose by between HK$100,000 and HK$300,000, or between 1.2 per cent and 3.4 per cent, according to Hong Kong Property (Services) and Midland Realty.

The owner of a 548 sq ft flat at Kingswood Villas in Tin Shui Wai raised the asking price by HK$200,000 to HK$6 million, according to Midland Realty senior sales manager Kin Tong.

The owner thought Lam's announcement "would improve property market sentiment, so [he] raised his price", Kin said.

Prices of used homes had dropped 0.7 per cent from May to July, according to the Rating and Valuation Department, as the market was battered by the massive street rallies that started in early June and by an escalation in the US-China trade war.

The Centa-City Leading Index, a private measure of used-home prices, fell 0.2 per cent from the end of July to August 25.

〈The Standard, September 6, 2019〉As Chief Executive Carrie Lam Cheng Yuet-ngor withdrew her controversial fugitive extradition bill - completing a U-turn that took three months to finish - some homeowners promptly took their flats off the secondary property market.

They're banking on Lam's gesture paving the way for housing prices to surge. More than likely, that's just wishful thinking.

Not long after Lam's underwhelming speech was televised on Wednesday, protesters returned to the streets to surround police and MTR stations. The popular belief is that if the bill withdrawal had been made in June, the protests would have quickly petered out.

Instead, protesters are now demanding more, including democratic reforms to allow the public to elect their chief executive and lawmakers by universal suffrage - a key demand that will undoubtedly be rejected by Beijing for now.

The stock market's strong rally - by about 1,000 points - as investors got prior wind of Lam's announcement, was temporary. After getting stuck listlessly amid the escalating Sino-US trade war and anti-government protests, any good news would be read disproportionately.

If the step from declaring the bill dead to officially withdrawing it was small, the 1,000-point rally marked the biggest gain in 10 months.

JPMorgan's forecast for the SAR's property market may be gloomy but substantiated. Whether local home prices will plunge up to 30 percent in the worst case scenario, as predicted by the US investment bank, is a matter of opinion. But the general consensus is negative overall.

〈Economic Times, September 5, 2019〉Heavy investment by mainland Chinese and Hong Kong companies into the United Kingdom has helped to compensate for a sharp fall by the rest of the world. They are buying because of a sharp fall in the British pound, confidence in the long-term strength of the British economy and a desire to park money away from China.

According to the UK Department for International Trade, the number of foreign direct investment (FDI) projects into the UK dropped to 1,782 in the fiscal year that ended on March 31, the lowest level in six years. It was the second consecutive annual fall since March 2017.

The fall in foreign investment had a knock-on effect on employment, with a 29 percent decrease in jobs created in the year that ended in March, compared with the previous year. In fiancial services and automotives, the number of jobs created fell by about a third. In advanced engineering, environment and infrastructure investment, job creation shrank by about 40 percent.

By contrast, mainland Chinese firms have spent 6.75 billion pounds (US$8.28 billion) on 15 major acquisitions in the UK this year, more than the 6 billion pounds in 23 deals in 2018.

Mainland acquisitions this year include the sale of money transfer company WorldFirst to Alibaba for 520 million pounds and the purchase of Loch Lomond Distillery to Zhang Lei's Hillhouse Capital for 400 million pounds, while Fosun International, which owns Wolves Football Club, is injecting 450 million pounds into holiday operator Thomas Cook, which has a history of 179 years, in exchange for 75 percent of the equity in its travel business and up to 25 percent of its airline.

〈The Standard, September 4, 2019〉Hong kong's retail leasing market registered an overall slowdown last month, as the escalating anti-government protests took their toll on the tourism and retail sectors.

Both sales and leases for street shops fell during the past few months as the political demonstrations raged on, especially those at the airport, said Midland IC&I chief executive Daniel Wong Hon-shing,

His property agency only recorded 49 street-shop lease agreements in the first 20 days of the past month, down 65 percent from the same period in July.

For the whole of August, Wong estimated total shop lease deals will drop 61 percent month on month to about 80.

Potential tenants are delaying new store openings or expansion plans, as the restaurant, cosmetic and pharmaceutical industries saw their turnover slump 50 to 60 percent - a body blow - amid complicated situations, Wong said.

Would-be tenants, he said, have little desire to look for business premises or pay asking prices - forcing landlords to offer discounts or other incentives - amid the gloomy market sentiment, as the current business climate is even worse than during the 2003 SARS epidemic.

The number of shop transaction registrations in the first 21 days of August declined 13 percent to 60, with the aggregate value falling 46.7 percent to HK$1.29 billion, data from Midland IC&I and the Land Registry showed.

〈The Standard, September 3, 2019〉China's home prices grew at 10.9 percent in the second quarter year-on-year, ranking the growth rate first among 56 markets for the first time in nine years, property consultancy Knight Frank said.

China's annual growth is actually a slowdown from the last quarter's year-on-year growth of 11.6 percent, said David Ji, director and head of research and consultancy for Greater China.

Other countries that were leading the board last quarter, such Slovenia and Latvia, have seen their growth curtailed this quarter, and this has pushed China to pole position, Ji said.

Residential prices in the second quarter in Hong Kong went up by 2.7 percent from a year before, or by 6.8 percent quarter-on-quarter.

Knight Frank's Global House Price index tracks residential prices across 56 countries and territories using official government statistics or central bank data.

From trade wars to Brexit, from political protests to weakening economic forecasts, headwinds are mounting and weighing on buyer sentiment, Knight Frank said.