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Property News Weekly Digest
〈The Standard, March 7, 2020〉Several market watchers believe the US Federal Reserve's emergency interest rate cut could prop up Hong Kong's property market, but the stimulus could be limited as banks may not follow by adjusting prime lending rates.

Centaline Mortgage Broker managing director Ivy Wong Mei-fung said a low-interest-rate environment and pent-up housing demands would support the local property market.

Wong expects the Federal Reserve to further cut rates this year, while Hong Kong's mortgage interest rate will maintain between 2.25 percent to 2.5 percent this year. She noted that Hong Kong's deposit rates have approached zero and there is little room for further prime rate rollback.

Meanwhile, Louis Chan Wing-kit, chief executive of Asia Pacific at Centaline Property Agency, expects home prices to fall 3-5 percent this year, due to lower interest rates.

The one-month Hong Kong Interbank Offered Rate, which is linked with mortgage rates, dropped over 15 basis points to a one-year low of 1.40429 percent.

Separately, Hong Kong's ultra-wealthy population will increase by 5 percent over the next five years, as the growth rate ranks 171th among about 200 markets, and luxury homes in the city remained the second most expensive in the world last year, according to property consultancy Knight Frank.

〈The Standard, March 6, 2020〉New Kai Tak run set amid sales woes

Two residential plots on the former Kai Tak airport's runway will be offered for sale in the next fiscal year, with one of them valued at up to HK$10.4 billion.

Kai Tak Area 4E Site 2 measures approximately 117,900 square feet. With a plot ratio of 5.5, the site has a total floor area of approximately 648,450 sq ft.

The seafront site, which neighbors Metro Park and Kai Tak Cruise Terminal, offers a panoramic view of Victoria Harbour.

Market surveyors value the plot at between HK$9.1 billion and HK$10.4 billion, or between HK$14,000 and HK$16,000 per buildable sq ft.

The adjacent Kai Tak Area 4E Site 1 is not far from the Kowloon Bay business area and measures approximately 59,700 sq ft, with a total floor area of 328,400 sq ft.

It has a market valuation of between HK$3.9 billion and HK$4.3 billion, or between HK$12,000 and HK$13,000 per buildable sq ft.

The escalating coronavirus outbreak continues to weigh on Hong Kong's land sales, and developers will be conservative in offering prices, said Leo Cheung Sing-din, executive director and corporate development director (valuation and property management) of property consultant Pruden Holdings.

〈Asian Post, March 5, 2020〉Shenzhen, the hottest property market on the mainland last year, has seen a 78 per cent decline in home sales amid the outbreak of Covid-19, brokerage Midland Realty said.

The technology hub reported 1,667 sales of older homes last month, down from 7,499 units and 10,000 units sold in January and December, respectively, the brokerage's research unit said.

The city, often referred to as "China's Silicon Valley", reported a boom in home sales after being earmarked by Beijing in August last year as a new special economic zone where wide- ranging reforms would be carried out.

The total number of transactions rose by 30 per cent between August and December, as buyers and investors bid big on its future prospects.

"We expected that the policies favouring Shenzhen would lead to robust sales until April this year. But this has stopped abruptly because of the coronavirus, and it is hard to see when the market will bottom out," said Fion He, director of the research unit.

Developers have had to shut their sales centres since January. And market observers said they did not foresee the buzz generated by the property market in Shenzhen - as well as in the other eight mainland cities included in Beijing's Greater Bay Area development plan - being replicated when a countrywide lockdown eventually lifts.

〈Asian Post, March 4, 2020〉Some Hong Kong homeowners are selling their properties at a loss as they worry about the city's dire economic prospects or even prepare to move abroad, analysts said.

At Valais in Sheung Shui, a 1,500 sq ft house changed hands at HK$21.3 million in late January at the onset of the coronavirus outbreak, handing the owner a loss of HK$10 million over the original purchase price, according to property agents who declined to be named because the transaction was private. Including taxes and expenses, the loss amounted to HK$11.6 million.

In another transaction, a 3,034 sq ft house with a 922 sq ft garden at Regalia Bay in Stanley was sold in mid-February for HK$67 million, a loss of about HK$5 million, they said.

"The losses reflect the urgency or desperation among some of the city's homeowners, given the constant flow of bad news," said Martin Wong, a sales manager at Midland Realty.

"Some of the homeowners feel that the prospects are not good so they want to sell quickly, especially amid the current epidemic."

The coronavirus outbreak has slammed the retail and hotel sectors as tourist arrivals slumped, just as the industries were already reeling from months of the US-China trade war and anti-government protests in 2019.

〈The Standard, March 3, 2020〉Wheelock presses on with Lohas Park launch

Property developers seem to have shrugged off Covid-19 fears, with Wheelock and Company (0200) to launch its Lohas Park project as early as this week, while property consultancy Jones Lang LaSalle said developers will face pressure to lower prices for new projects.

Wheelock named the Lohas Park Phase 9C development Ocean Marini and uploaded a sales brochure.

The project will provide 503 flats, with most being two-bedroom and three-bedroom flats.

Only two small and medium residential projects hit the primary market in the first four weeks after the Chinese New Year, offering around 40 flats, compared to an average of 530 units during the same period over the past three years, JLL said.

JLL estimates the market sentiment would remain lackluster before Covid-19 concerns are mitigated, and that developers may need to cut prices when they launch new projects in the second half of the year due to sufficient supply and market uncertainties.

In the secondary market, the blue-chip housing estate Tai Koo Shing in Quarry Bay only recorded two transactions so far this month, according to Centaline Property Agency.