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Property News Weekly Digest
〈Asian Post, May 8, 2021〉The mainland tech hub of Shenzhen recorded the fastest growth in luxury home prices in the world in the first quarter, up by 18.9 per cent over the same period a year ago and beating traditional prime property markets such as Hong Kong, London, New York and Paris, according to property consultancy Knight Frank.

Shanghai and Guangzhou also came second and third in the list of 46 cities, registering price growth of 16.3 per cent and 16.2 per cent respectively.

Traditional luxury property markets such as Hong Kong, London, Dubai, Paris and New York languished near the bottom of the rankings, placing 42nd to 46th, respectively, with falls of between 3.1 per cent and 5.8 per cent in prime prices over the period. Prime prices are defined as the top 5 per cent of the housing market in value terms.

"China was first to recover from Covid-19 with property prices rebounding in the second quarter of 2020," said Martin Wong, director and head of research and consultancy, Greater China, Knight Frank. "All first-tier cities were expected to lead home price growth following the Covid-19 pandemic with Shenzhen, Shanghai and Guangzhou having relatively less stringent policy restrictions than Beijing."

China's successful anti-pandemic measures enabled the economy to grow by 2.3 per cent in 2020, compared with a contraction in global output of about 3.3 per cent. In the first quarter of 2020.

〈Asian Post, May 7, 2021〉Wharf Real Estate Investment (1997), owner of Times Square and Harbour City luxury malls, will reduce rental support this year, as local consumption has almost recovered, said chairman and managing director Stephen Ng Tin-hoi.

Wharf REIC offered HK$2 billion of rent support to retail tenants last year but Ng said the rent support will be less this year as the overall rents of new rental leases have dropped. He added that mutant viruses are a fresh risk to the retail industry.

Meanwhile, Swire Properties (1972) said the occupancy rate of its Hong Kong office portfolio rose 1 percentage point to 97 percent as of March 31 from December 31, while retail sales at Pacific Place mall grew 31.1 percent in the first quarter.

Also in the commercial market, the tender for a commercial site at Caroline Hill Road in Causeway Bay closes today, and Hysan Development (0014), the biggest landlord in Causeway Bay, is considering bidding for the plot.

〈China Daily, May 6, 2021〉Hong Kong's home prices will rise by as much as 5 per cent this year, S&P Global Ratings said yesterday.

The rating agency said buoyant housing demand, a chronic shortage of land and home supply, as well as a low- interest-rate environment, would support price rises.

It joins a chorus of industry observers who forecast home prices in the city would rise this year.

"During the past two decades, Hong Kong property prices have tended to bottom out when the jobless rate has or is about to peak. This will underpin developers' margins in residential projects," S&P said.

It said the city's unemployment rate seemed to have come off a peak of 7.2 per cent in February to 6.8 per cent in March, while its economy grew by 7.8 per cent in the first quarter.

These developments would, ironically, hurt many Hongkongers' hopes of owning their own flats, as a revival in the economy and falling unemployment could lift home prices.

Hong Kong property, with the exception of offices, would start to shake off the effects of the coronavirus pandemic this year, S&P said. Retail landlords, too, will reduce rental concessions as shopper footfall improves.

〈Business Post, May 5, 2021〉Rents in the affluent area of Mid-Levels have dropped up to 25% from the peak two years ago as many expatriates leave Hong Kong.

Hong Kong was one of the most expensive cities in the world, but an exodus of expatriates after citywide protests, a declining population and unemployment had led to sluggish rental demand, Bloomberg reported.

Average rent for private housing declined to HK$33.60 ($4.33) per square foot in the first quarter, the lowest since the end of 2016, data from Centaline Property Agency Ltd. showed.

The city posted an unemployment rate of 6.8% in March, although gross domestic product increased 7.8% in the first quarter. Without a job, some residents had chosen to stop renting and move back to live with family members.

Rents went down the most significantly at high-end properties in Mid-Levels, Deep Water Bay and other areas favored by Western expats and wealthy mainland Chinese people. The decrease was as much as 25% compared with mid-2019, according to rental website Spacious.

〈The Standard, May 4, 2021〉The United States is leveraging on the SAR's property market at a time when the office segment is reeling from pandemic woes.

The American Chamber of Commerce in Hong Kong bought a floor at Hong Kong Diamond Exchange Building in Central for HK$85.8 million after it sold its office space of 5,968 square feet at Bank of America Tower on Harcourt Road for HK$145 million in October.

The 2,750-sq-ft floor at the 26-story Diamond Exchange Building at 8-10 Duddell Street was sold off at HK$31,229 psf. The seller, who bought the floor for HK$12.2 million in 1991, will pick up HK$73.6 million.

The deal went through after the sale of the US government's six-block residential property at Shouson Hill - a thorny issue for potential buyers amid the Sino-US rift. That was not completed until February.

Beijing had stepped in unexpectedly and said its approval was needed in late 2020.

The Land Registry told Hang Lung Properties (0101), which agreed to buy the luxury villas for HK$2.56 billion in September, that if the US consulate general intended to rent, purchase or sell any property in Hong Kong, then the US government must make a written application to China at least 60 days before any deal.