No. of view: 3032
Property News Weekly Digest
〈Asian Post, February 29, 2020〉Sinking prices loom for harbourfront land
Described as the "last strategic business site", a prime location in Central is being put on the market by the government at a time when economic sentiments are hitting rock bottom.

Moreover, top officials say it doesn't need to go to the highest bidder, but the one with the "best designs", whatever that means.

"Money is not our only consideration," Secretary for Development Michael Wong Wai-lun said. "[It] is the last site that is so strategically located and iconic. Its proper design and utilisation is very important to our future economic development."

In other words, whoever gets the site may not have to pay top dollar for what is perhaps the best commercial plot of land left on Hong Kong Island. Am I missing something? This doesn't sound like the government taking "a vote of confidence" in the local property market, as this newspaper has reported. It's the eventual buyer or buyers who will be getting a steep discount, so long as the design ticks all the right boxes.

Analysts think the ailing business environment amid social unrest and the novel coronavirus crisis could lower developers' bids by 10 to 15 per cent. If their estimates are right, who wouldn't have confidence with such a large margin of safety?

〈Asian Post , February 27, 2020〉Hong Kong's commercial property market, already reeling from last year's protests, is about to slide further into the doldrums as the coronavirus epidemic saps demand, according to analysts.

The volume of transactions for office, retail and industrial properties is poised for a historic low this month, having already sunk to record levels in the previous two months.

Meanwhile, a grade A office building near Central saw its rent drop by two-thirds to HK$42 per square foot, the lowest in 10 years.

The number of deals signed in the commercial real estate sector was likely to fall below 200 this month for the first time since records began in July 1995, said Wong Leung-sing, senior associate director of research at Centaline Property Agency.

"The number has been below 300 for a period of five consecutive months, averaging about 250, and that's the first time that has happened," Wong said.

"The figure in January [2020] has not reflected the impact of the coronavirus outbreak. Transactions are likely to remain low."

In particular, the number of office transactions in the three months to March may add up to fewer than 150, marking a record low, according to Midland IC&I.

"This epidemic will freeze the turnover of offices in the short term," said Eric Ong, chief operating officer and director of the commercial department at Midland IC&I.

〈The Standard, February 28, 2020〉Kong property prices might plunge due to the coronavirus outbreak and an economic slowdown, saying the situation now is different from the financial crisis in 1997, when there was an abundant supply of flats.

In response to a caller on a radio program, who asked if the government would introduce measures to prevent prices of flats from dropping, Chan said people do not have to worry that prices of private residents will "fall off a cliff."

Compared with the current situation, there was a larger home supply, higher unemployment rate and higher mortgage rates in 1997-1998, when developers continuously launched projects and pulled down the prices significantly, he said.

The property market plunged by about 70 percent between 1997 and 2004 as the crisis was followed by the outbreak of SARS in 2003.

Chan added that the government would not withdraw cooling measures as it might send the wrong message to the market and push prices up again.

The average annual private unit production is expected to be 19,600 from 2020 to 2024, while the production of public home units from 2019-20 to 2023-24 will be about 100,400, according to the budget.

The government plans to continue to provide land to increase housing supply through new projects, rezoning sites and developing brownfield clusters and urban squatter areas.

〈Asian Post, February 27, 2020〉New World sells stakes in two Hong Kong malls
New World Development has sold its interest in two Hong Kong shopping centres to MTR Corporation for HK$3 billion as the local retail sector slips into a deep slump.

The developer said the sale of the "non-core" assets - a 50 per cent stake in Telford Plaza II in Kowloon Bay and a 21 per cent share of PopCorn 2 in Tseung Kwan O - was part of the group's strategy to fine-tune its asset structure.

New World would continue to dispose of non-core assets to "recycle capital" for the development of its core businesses, the company said in a statement.

"New World is committed to enriching its assets and business portfolios in Hong Kong and on the mainland to increase recurring income," it said, adding that between 2019 and 2026, the total gross floor area of the company's investment properties in Hong Kong and on the mainland would increase by three times and six times respectively.

The disposals come as Hong Kong's economy grapples with a recession for the first time since 2009 following months of social unrest last year. The Covid-19 epidemic is now adding to the burden on local retailers and property developers.

"The transactions reflect the dire scenario in Hong Kong's retail sector," said Jeffrey Mak, an analyst with CGS-CIMB Securities.

〈China Daily, February 26, 2020〉Aspiring homeowners were not left out in the 2020-21 Budget, with a wide range of measures proposed to support the city’s runaway housing market, including the launch of a HK$1 billion ($128 million) program for fixed-rate mortgage loans to help those aiming to buy an apartment in the world’s least affordable property market.
Financial Secretary Paul Chan Mo-po said in presenting his fourth budget on Wednesday the scheme will offer homebuyers more loan options and reduce the risks of interest-rate volatility.

Under the plan, Hong Kong Mortgage Corp will offer fixed-rate mortgage loans through banks, with interest rates of 2.75, 2.85 and 2.95 percent per annum for periods of 10, 15 and 20 years respectively. The loan amount will be capped at HK$10 million.

Alva To Yu-hung, vice-president of Cushman & Wakefield, welcomed the offer of more loan options, saying it will support the property market in the near term.

However, he advised homebuyers to be careful as relaxing mortgage-loan plans may increase risks amid the current economic downturn.

Jitters over the novel coronavirus epidemic have brought Hong Kong’s property market to a halt as buyers stay away. According to Centaline Property Agency, only 13 apartments at the city’s 10 largest housing estates changed hands in the first three weeks after the Lunar New Year.