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Property News Weekly Digest
〈Asian Post, June 26, 2021〉The starter homes project by the Urban Renewal Authority is a step in the right direction but at the same time, it will not solve the fundamental problem that land rights in the New Territories are being held to ransom by the villagers.

Reform is needed; however, I doubt anyone reading this will have the opportunity to witness such reform, given the mindset created by the former colonial government.

Hong Kong seems to have faced a shortage of land for over a couple of decades. The population has grown by around 900,000 over the past 20 years, with a number of flats held by owners who have little incentive or intention to lease to the public market.

According to data from the Rating and Valuation Department, the overall vacancy rate of private residential units in Hong Kong was 4.3 per cent in 2020, with large homes (saleable area measuring 100 sq m) having a vacancy rate of 7.4 per cent. It is important to note the above does not include village houses.

The general vacancy rate over the past decade has stayed around 4 per cent. It is important to focus on the pool of private housing which is affordable for the average couple, and some may be surprised to learn we have seen a slow but upward trend in vacancy rates in smaller homes measuring less than 100 sq m (from 3.3 per cent in 2016 to 4.0 per cent last year).

〈The Standard, June 25, 2021〉The first residential project on the runway of Hong Kong's former airport at Kai Tak has been priced about 13 per cent lower than a development put on sale in the area in April.

China Overseas Land & Investment yesterday set the prices of the first batch of 212 flats at One Victoria at an average of HK$22,977 per square foot.

"The project has a lot of units, so the prices were set more attractively to bring in registrations of intent," said Sammy Po Siu-ming, chief executive of Midland Realty's residential division. The project also competed with leftover stock in the area, he added.

The price launch comes amid a boom in the housing market. Residential transactions have surged by about 35 per cent in the first half of this year, the highest level since the second half of 2012, to more than 38,500, according to Midland Group.

Deal values have also climbed to HK$366 billion, the highest since the first half of 1997.

〈The Standard, June 24, 2021〉Hong Kong office market recorded its first positive net absorption since July 2019, reaching 116,300 square feet in May, according to JLL Hong Kong's latest report.

The overall vacancy rate fell 0.1 percentage points month-on-month to 9.4 percent.

More corporate tenants are opting to upgrade their offices as rents have become more affordable, the real estate consultancy said.

For instance, food delivery company Foodpanda rented two floors at Times Square in Causeway Bay.

The gross leasing volume in Central has improved in recent months, with the vacancy rate in the submarket retreating 0.3 percentage points to 7.2 percent.

While rental growth was recorded during the month, rents in the overall market still declined by 1.4 percent month-on-month as landlords were more willing to lower their asking rents to entice new tenants. Offices in Tsim Sha Tsui experienced the biggest rental decline while rents in Central were more resilient. The average monthly rent was HK$56.3 per sq ft.

〈Asian Post, June 23, 2021〉An influx of mainland buyers into Hong Kong's super-deluxe developments since early this year could further fuel home prices in the world's most expensive property market, and the trend will become more obvious once the border reopens.

Buyers from the mainland who settled in the city, dubbed "new Hongkongers", have already made their presence felt in the city's property market. They bought 38 per cent of Hong Kong's luxury homes - each priced more than HK$100 million - in the first four months, 2 percentage points more than the whole of last year, and more than 32.9 per cent in 2019, according to data provided by Midland Realty.

"When the border reopens, we expect mainland Chinese to [return] to snap up residential property," said Avan Pau, senior director of investment property and private office capital markets at CBRE Hong Kong.

Individual and corporate real estate investors from the mainland have been the lifeblood that had sustained the eye-popping prices of the city's property industry in the past decade, from multimillion-dollar mansions to some of the world's most expensive offices in Central.

Their presence in the city, muted since the street protests of 2019, could resume when the city's border with Shenzhen reopens with the easing of the coronavirus outbreak, allowing business travellers, tourists and investors to return.

New Hongkongers already make up 60 per cent of the owners in two of the city's most exclusive residential neighbourhoods: CK Asset Holdings' 21 Borrett Road luxury flats at the Mid-Levels, as well as Mount Nicholson on The Peak by Wharf Holdings and Nan Fung Development, according to land title searches conducted by the Post.

〈Business Post, June 22, 2021〉Turkmenistan capital Ashgabat takes spot as cheaper rents erodes Hong Kong's position

Ashgabat, the Turkmenistan capital with the world's largest concentration of white marble-finished buildings, has unseated Hong Kong from its three-year perch as the most expensive urban centre on earth for expatriates, according to Mercer's 2021 cost of living survey.

The central Asian capital, where inflation slowed to 7.6 per cent last year from 13.3 per cent in 2018, surpassed Hong Kong in the top spot "primarily due to a continuing socio-economic crisis which has led to food shortages and hyperinflation", Mercer Asia-Pacific's global mobility leader Julia Radchenko said.

Hong Kong, which topped the ranking for three consecutive years because of the city's costly property prices, slipped to second place. The Lebanese capital Beirut jumped 42 spots to third place.

Mercer's annual report ranks 209 cities worldwide based on the comparative cost of expenses including housing, transport, food and entertainment, with New York City used as a baseline comparison.