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Property News Weekly Digest
〈China Daily, December 7, 2019〉The Hong Kong Monetary Authority will adopt necessary measures including a possible further cut of the counter cyclical capital buffer ratio for banks to maintain financial stability amid a deteriorating economic outlook, the authority’s chief executive said.

Maintaining the soundness and stability of Hong Kong’s financial system has been the most important task as the city is facing acomplex and volatile internal and external environment, said Eddie Yue Waiman, HKMA’s chief executive,at a press briefing in Beijing on Wednesday.

“If the economy further declines and the property market suffers correction,there is room for us to further lower the CCyB (counter cyclical capital buffer),” Yue said. “Maintaining public and market confidence is crucial for us to keep the financial system stable.”

The HKMA cut the CCyB ratio to 2 percent from 2.5 percent in October citing that economic indicators have signaled significant deterioration of the economic environment in Hong Kong since June.

The city’s economy has been hit by a set of factors including global economic slowdown, trade tension between Beijing and Washington and local social unrest, which have led to a sharp drop of retail sales and the number of tourist arrivals.

〈China Daily, December 6, 2019〉MTR Corporation (0066) estimated that anti-government protests will cause a negative impact of HK$1.6 billion on the net profit of its Hong Kong recurrent business but it plans to maintain the present progressive ordinary dividend policy as it deemed its overall financial position remains sound.

The subway operator said its Hong Kong transport operations, station commercial businesses, and local property rental businesses were all adversely affected.

The operator explained that social unrest had led to a reduction in patronage of its services, with October and November both seeing the steepest decline of 27 percent each from a year ago.

The total patronage of the company fell 14.2 percent year-on-year to 744.3 million passengers during the period of July to November.

Instances of damage due to the vandalism of MTR stations and facilities have strapped the company with repair and maintenance costs.

Moreover, almost half a year of protests have resulted in a need for enhancement of staffing and security as well as retail concessions and abatements, which increased company costs and further hurt profitability. On the other hand, the MTRC expected to record profits arising from its property development projects at Malibu, or Lohas Park Package 5, and the shopping center of Lohas Park Package 7.

〈The Standard, December 5, 2019〉Festival Walk closure for repairs during peak Christmas season a huge blow for business

Hong Kong's upmarket mall Festival Walk will remain closed until sometime during the first quarter of next year, leaving branches of well-known retail and catering brands to suffer revenue losses in the peak festive period of Christmas and New Year.

Singapore-listed Mapletree North Asia Commercial Trust has announced details on the reopening of its severely damaged Kowloon Tong shopping centre, weeks after protesters vandalised multiple floors and also set a large artificial Christmas tree on fire.

The mall's owner said it would need to repair glass entrances, curtain walls, escalators, lifts, and glass balustrades along the common areas.

"We are working closely with our consultants and contractors to reopen, either partially or fully, in the first quarter of 2020," the trust's manager said in a statement.

〈Asian Post , December 4, 2019〉Homebuyers spent HK$214 billion on more than 20,000 new flats in the first 11 months of the year, the most since 2004, as developers rushed to offload stock because of the impending vacancy tax and uncertain market outlook, Ricacorp Properties said.

The average flat price fell 26.8 per cent to HK$10.67 million this year after having risen for three straight years to a record HK$14.59 million in 2018, as nearly six months of protests hurt sales, the property agency said.

"The average price has fallen this year as developers launched new projects with smaller units at deeper discounts, particularly in the second half when market sentiment turned sour," said Derek Chan, head of research at Ricacorp.

CK Asst Holdings, Hong Kong's second-largest developer, launched its first new property project of the year in October at discounts of as much as 10 per cent, bowing to a stalling market that had by then been rattled by four months of unprecedented street protests.

The flagship company of Hong Kong's wealthiest man Li Ka-shing priced its flats at Seaside Sonata in Cheung Sha Wan in New Kowloon 10.4 per cent lower than Henderson Land Development's The Addition, which was launched in March in the same neighbourhood at an average price of HK$20,850.

〈The Standard, December 3, 2019〉The Hong Kong Mortgage Corporation has approved some 1,300 mortgage applications of which 90 percent are first-time homebuyers, following the government's relaxation on mortgage requirements.

In the Policy Address, Chief Executive Carrie Lam Cheng Yuet-ngor announced raising the mortgage cap for first-time homebuyers, with the value of property eligible for 90 percent loan-to-value ratio doubled to HK$8 million.

For an 80 percent ratio, the cap on value will be raised to HK$10 million from HK$6 million.

In a written reply to lawmakers Chan Chun-ying and Paul Tse Wai-chun, Secretary for Financial Services and the Treasury James Lau Yee-cheung said the 1,300 applications were approved by the HKMC's Mortgage Insurance Program from October 17 to November 22.