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Property News Weekly Digest
〈Asian Post, January 4, 2020〉Louis Vuitton, the world's top luxury brand, has become the first major label to respond to the impact of the anti-government protests that have gripped Hong Kong for almost seven months by closing one of its stores in the city.

The brand, owned by luxury group LVMH, plans to shut its store in Times Square, Causeway Bay, after the mall's owner, Wharf Real Estate Investment Corporation (Wharf Reic), refused to lower the rent on its prime second-floor space, according to sources familiar with the matter.

Louis Vuitton has eight stores in Hong Kong, one of them in the nearby Lee Gardens mall. It previously announced plans to open a ninth store at Hong Kong International Airport in 2021.

The French label's large retail footprint in the city, which is similar to that of other luxury brands, made sense in the past when Hong Kong attracted large numbers of shoppers from the mainland, eager to take advantage of lower prices for luxury goods in the city.

However, as some protests have turned more violent and anti-China sentiment has increased - with Putonghua speakers physically attacked and China-linked businesses repeatedly vandalised - mainland visitors have shunned Hong Kong.

〈Asian Post, January 3, 2020〉More visitors to gambling hub than Hong Kong during holiday period for first time as tourists avoid entering the city after months of protests

Macau welcomed more visitors from the mainland than Hong Kong over the Christmas and New Year period for the first time,according to travel agency figures.

Trips to the gambling hub spiked at the end of December following celebrations to mark the 20th anniversary of its return to Chinese rule, the country's biggest travel website said in a report.

It also said Macau's growing popularity as a place to shop had further helped to boost visitor numbers.

The festive atmosphere in Hong Kong, where Christmas is widely celebrated, makes the city a popular destination at this time of year, but the report said six months of political turmoil had seen its appeal diminish.

Statistics from the Immigration Department showed that about 450,000 mainland travellers entered the city between December 21 and 26, with a further 300,000 crossing the border between December 29 and January 1.

However, this was less than half the total from 2018, when more than a million visitors arrived between December 21 and 26, and more than 800,000 between December 29 and January 1.

〈The Standard, January 2, 2020〉Gloom and doom was the general feeling as Hong Kong ushered in the new year after months of turmoil. But there has been some positive news on the housing front, such as the voluntary offer of land by another property developer to make homes for the needy more affordable. It may just be a drop in the ocean, but the move renews the momentum in trying to solve the city's housing crunch.

The plan by Wheelock Properties to loan three plots of land, at a cost of HK$1 each, is to be welcomed. Some 2,000 "transitional" homes may be built for more than 6,000 families pending the allocation of public flats. Together with offers from Henderson Land Development and New World Development, nearly 4 million sq ft of land is now available for poor families with temporary housing needs.

Coming after the attack by mainland media on local developers for contributing to the ongoing woes, the steps may be greeted with scepticism in some quarters. That makes well-defined mechanisms to guard against collusion and conflicts of interest all the more important.

Land supply is primarily the duty of the government. The latest land sale programme comprises three residential sites, two in Mong Kok and one in Kwun Tong, yielding 1,850 units in total. This includes 1,000 starter homes for sale at below market prices. Officials said the supply over the past nine months had already reached 90 per cent of the annual housing target. Another 93,000 private units will be available in three to four years. Assuring as it sounds, affordability is still the issue. It will not help if prices remain beyond the reach of average buyers.

〈China Daily, December 31, 2019〉Slowing land sales amid street protests and economic recession disrupt efforts to alleviate housing shortage in most expensive residential market

Hong Kong may fall short of its annual target for new private homes supply in the city as street protests and an economic recession disrupted efforts to alleviate a housing shortage in the world's most expensive residential market.

The government and private developers provided enough land bank to build 9,820 homes in the nine months to December 31, Secretary for Development Michael Wong Wai-lun said yesterday.

The government and Urban Renewal Authority will only release land to accommodate another 2,030 units in the next three months, indicating a deficit of about 10 per cent versus its 13,500 target for the year to March 31.

"We are almost meeting 90 per cent of our annual target" based on existing and future land provisions, Wong said, blaming part of the shortfall on the smaller contribution from private developers.

The government has earmarked parcels in Mong Kok and the Anderson Road quarry site in Kwun Tong for tender between now and March 31.

The Urban Renewal Authority will separately invite bidders for a parcel of land in Sham Shui Po, capable of providing 180 homes.

The housing shortage is a thorny issue for the government after a 15-year market boom pushed home prices to record highs up to May last year.

〈Asian Post, December 30, 2019〉Across-the-board falls predicted by industry players amid US-China trade war, fears of further social unrest, and an economy in technical recession

Prices of Hong Kong properties - residential, retail and office - are expected to fall next year, according to a majority of 15 industry players and analysts polled by the Post, with the city's continuing anti-government protests, the US-China trade war and an economy in technical recession weighing on the sector. Luxury homes and high street shops are to bear the brunt.

The respondents included property consultants JLL, Knight Frank, Colliers International, CBRE and Cushman & Wakefield, property agents Centaline Property Agency, Midland Realty and Ricacorp Properties, property developers such as Sun Hung Kai Properties (SHKP), Sino Land, Henderson Land Development, Lai Sun Development, as well as financial services firm CGS-CIMB Securities and Maggie Hu, an assistant professor of real estate and finance at Chinese University.

JLL, Knight Frank, Colliers, Cushman, Centaline, Lai Sun, Empire Group Holdings, and CGS-CIMB said home prices would fall. Midland Realty and Ricacorp, meanwhile, said they would rise 5 per cent to 10 per cent. SHKP, Sino Land and Henderson said they would be stable, and Maggie Hu said home prices would stay flat.

Eight out of 14 respondents, or 57 per cent, said they expected the prices of general housing to fall 15 per cent with one predicting luxury homes to fall 20 per cent. US commercial real-estate services and investment firm CBRE does not cover the residential sector.

"The longest bull market in the Hong Kong property sector's history came to an end in the second half of 2019, because of the local social movement and economic uncertainties," said Joseph Tsang, chairman of US commercial property services firm JLL in Hong Kong.