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Property News Weekly Digest
〈Asian Post, April 26, 2020〉The number of new homes that started construction fell by 77 per cent in the first quarter of the year from the previous three-month period, to just 900 units - the lowest since the third quarter of 2017, data from the Transport and Housing Bureau showed.

The figures show the impact of the coronavirus outbreak on Hong Kong's property market.

As the economic downturn dampens demand for new homes, developers are adopting a cautious approach by scaling back the construction of new projects and launching fewer new flats.

"The entire construction cycle has slowed down," said Ryan Ip, head of land and housing research at think tank Our Hong Kong Foundation.

He added that, since the pandemic has hit sentiment, developers would be reworking their strategy, which may include rejigging the progress of their construction schedule and slowing down launches as buyers stay on the sidelines.

Thomas Lam, executive director at Knight Frank, said a reduced supply of new flats would not necessarily push prices higher, as purchasing power remained depressed in this economic climate.

〈China Daily, April 25, 2020〉Hong Kong home prices are falling at an accelerated pace amid the novel coronavirus pandemic in the world’s least-affordable city to live in.

The private domestic unit price index of the Rating and Valuation Department slipped 2.1 percent to 370.7 in February this year — the lowest level in a year — while the gauge dived 6.6 percent from its record high recorded in May 2019.

The volume of transactions in residential apartments hit 4,555 for a total consideration of HK$35.81 billion ($4.62 billion) in March, posting increases of 3.2 percent and 1.4 percent respectively from the previous month. The figures, however, slipped 29.1 percent and 32.2 percent respectively on a yearly basis.

Buying sentiment had just begun to pick up as 2020 kicked o , when the coronavirus pandemic sent fresh shock waves through the market beginning in February.

"Home prices are on a downward trend in the face of a technical recession in Hong Kong. The jobless rate is expected to exceed 5 percent in the face of a worsening economic outlook locally and globally," said Alva To, Cushman & Wakefield’s Greater China vice-president and Greater China head of consulting.

〈The Standard, April 25, 2020〉Property consultancy CBRE said the vacancy rate of shops on Tier 1 streets climbed to 8.6 percent in the first quarter, the highest in four years.

Among the four core business districts - Tsim Sha Tsui, Mong Kok, Causeway Bay and Central - the vacancy rate in Central reached 14.9 percent, the highest among the four districts.

"We foresee that in the short run in 2020, the vacancy rate will increase," said Lawrence Wan, senior director for advisory and transaction services in retail for CBRE Hong Kong.

Wan expects Hong Kong street shop rents to fall by about 20-25 percent this year.

"The current situation is similar to that in 2003," said Marcos Chan, head of research for the Greater Bay Area & Hong Kong at CBRE.

Wan also said luxury brands are shutting shops, but are looking for opportunities for relocation or even expansion in Hong Kong due to lower rents.

"Expansion may happen in the first or second quarter next year," Wan said.

In the office market, Grade A office rents in Central for the first three months dropped by 4.1 percent quarter-on-quarter.

Alan Lok, executive director for advisory and transaction services at CBRE, expects office rents in Central, Wan Chai and Causeway Bay to fall by 10 to 15 percent this year.

〈Asian Post, April 22, 2020〉The parcels, two residential, one commercial, could fetch up to 20pc less than mid-2019 levels amid pandemic and economic gloom, experts say

Three plots of land the Hong Kong government is going to sell through tender could attract bids that are up to 20 per cent below mid-2019 levels, which in turn could determine transaction volumes and prices in the world's most expensive property market, industry consultants said.

A residential plot in Mong Kok, the tender for which closes on Friday; a commercial plot in Kai Tak and residential land on Anderson Road in Kwun Tong, the tenders for which close next month, could see their estimated valuations cut by as much as a fifth by developers, consultants Knight Frank and Centaline Surveyors say.

The coronavirus pandemic, a bleak economic outlook as well as rising unemployment continue to weigh on the city's property market. The prices of used homes have fallen by 6.6 per cent between a peak last May and February, according to the Rating and Valuation Department. How the land sales pan out might affect the decision-making of some homeowners, said James Cheung, a surveyor at Centaline.

"Developers are major market players. Their bids will be indicative of the property market and economy in the future," he said.

〈The Standard, April 21, 2020〉Property developers launched new sales amid the easing of the Covid-19 situation in Hong Kong but only received a lukewarm response from buyers, with China Evergrande (3333) selling only 10 percent of the 269 flats on offer at Emerald Bay Phase 2 in Tuen Mun over the weekend.

China Evergrande released 145 flats in the second price list at Emerald Bay Phase 2 on April 14, which were offered at an average HK$16,752 per sq ft after discounts, around 3 percent higher than that of the first batch.

Meanwhile, Wheelock Properties yesterday released 51 flats in the sixth price list of Ocean Marini in Lohas Park, priced at HK$16,705 per sq ft after discounts. The cheapest 547-sq-ft flat was offered at HK$8.7 million. Wheelock has collected about HK$2.42 billion after selling 274 of the 310 flats at the project.

In the secondary market, Centaline Property Agency reported 17 secondary transactions at ten major housing estates over the past weekend, down by 15 percent week-on-week.

In Wong Chuk Hang, a mainland vendor would suffer a loss of about HK$4.3 million after selling a 1,368-sq-ft flat at Marinella for HK$42.5 million, or HK$31,067 per sq ft.

In Hung Hom, a 194-sq-ft flat at Upper East changed hands for HK$4.23 million, or HK$21,804 per sq ft, after HK$170,000 was cut from the first asking price. The vendor would incur a loss of around HK$130,000 after paying commission fees and stamp duties.