HONG KONG: In a cramped space on the fifth floor of an old industrial building in Hong Kong, Huang Shaochang and his wife live in some of the priciest real estate per square foot in the world - a 35 sq ft room with a bunk bed and small TV.
Sky-high property prices forced them into these squalid conditions and prompted the Hong Kong government last month to impose measures to rein in residential home prices, which jumped 20 percent in the first nine months of this year even as the economy contracted 0.1 percent in the second quarter.
In October, Hong Kong leader Leung Chun-ying singled out the re-emergence of cage homes - wire mesh hutches stacked on top of each other - and cubicle apartments such as Huang's as issues that highlighted the gravity of poverty that existed alongside one of Asia's glittering financial centres.
More than 1.1 million people, or 17 percent of Hong Kong's population, lived below the poverty line in 2011, earning less than HK$3,500 ($450) per month, according to the Hong Kong Council of Social Services. It defined poverty as earning less than half of the average monthly income.
Huang, a part-time laborer who moved to Hong Kong from Shanghai two decades ago, pays HK$1,400 a month, or around HK$40 per sq ft, for his tiny room, compared with average rents for second-hand homes of around HK$21 per sq ft.
"I never expected the situation would be like this in Hong Kong. I cried every day when I first came. I just wanted to go back to China," said his wife, Li Rong, who arrived two years ago after leaving their now eight-year-old son behind.
WEALTH GAP
The former British colony's yawning wealth gap and protests over soaring property prices have brought Leung, who took over as chief executive on July 1, head-to-head with some of the city's billionaire property developers, who some analysts say could turn on the leader.
"Hong Kong is still monopolized by property developers and if they can't stand it anymore, they will go to Beijing to complain," said political commentator Chip Tsao.
"He has to be careful not to undermine China's interests. There are so many rich Chinese and high-ranking Chinese officials holding top-class properties in Hong Kong and these were bought at very high prices."
Octogenarian tycoon Li Ka-shing, who controls property giant Cheung Kong (Holdings) Ltd <0001 .hk=".hk">, stood by Leung's main rival and early front-runner, Henry Tang, in the leadership poll in March even after Beijing signaled that it favored Leung.
Although Leung was chosen by a 1,200 member election committee, central government leaders in Beijing had said they wanted a candidate with broad popular support. Tang, who was perceived by many in Hong Kong as in the pocket of tycoons, floundered after a series of scandals.
FEELING THE SQUEEZE
A sub-index of Hong Kong-listed property stocks <.HSNP> that includes bellwethers Cheung Kong and Sun Hung Kai Properties <0016 .hk=".hk">, Asia's No. 2 property developer by market value, lost as much as 4 percent from its close on October 26, after the latest measures to rein in home prices were announced, although it has since mostly recovered.
Leung has said he cannot rule out further steps and some market watchers say the latest curbs, including a 15 percent tax on non-resident buyers, may only temporarily deter cash-rich mainland Chinese, who many in Hong Kong blame for pushing up prices.
Mainland buyers accounted for 21 percent of new homes in the small and mid-sized house sector in the third quarter of 2012, according to a report by Centaline Property agency.
Real estate prices are now 107 percent higher than their trough in 2008 and 26 percent above the previous peak hit in 1997, and it's not just the city's poor who are feeling the squeeze.
A managing director at a large U.S. bank, who has lived in the city for more than a decade, said a joke now often repeated in industry circles quips that: "The only place where a rich banker feels extremely poor is Hong Kong."
Compounding the grumbles stirred by record property prices, the generous housing allowances that were once the norm for expatriate staff in the financial industry have been phased out, so professionals in the business are facing steep jumps in housing costs once their rental contract lapses.
"Most people in my group are beginning significant downgrades - like 50 percent down," he said.
MAINLAND DEMAND
In Yuen Long district, a former farming area about an hour's commute from the heart of the financial district, home prices have also surged, buoyed by growing demand from mainland parents eager to educate their children in the city.
"I think about 30-40 percent of mainland (buyers in Yuen Long) bring their children to the schools," said David Tang at Midland Realty in the New Territories district, adding that prices there have risen about 20 percent in the past two years.
In Tuen Mun, near the prestigious Harrow International School that opened this year, prices have jumped 50 percent over the past two years, according to Centaline Property agency.
As soaring property prices squeeze people on both ends, Leung will have his work cut out to satisfy everyone.
"I believe executive Leung is a hard-working and trust-worthy leader. But I hope he can do more for minorities like us," said Huang, sitting on the lower bunk with his wife.
Another tenant in a similar-sized room on the same floor, which is about 900 sq ft (84 sq metres) in total and home to nearly 30 others, doesn't hold out much hope.
Unemployed Xie Wingjie, 39, originally from Hong Kong but who grew up in the United States, said he has few options.
"I just go with the flow and see what happens. There is no future here. How simple is that?"
By Reuters
Showing posts with label Hong Kong. Show all posts
Showing posts with label Hong Kong. Show all posts
Tuesday, November 6, 2012
Saturday, September 15, 2012
HK says risk of property bubble higher after US stimulus
HONG KONG: The latest stimulus from the US Federal Reserve increases the risk that Hong Kong's redhot property market will overheat and authorities may act to deal with that at an “appropriate” time, Hong Kong's de facto central bank said.
The Federal Reserve kicked off another aggressive stimulus programme on Thursday, known as QE3, saying it would pump US$40bil into the. economy each month until it saw a sustained upturn in the weak jobs market.
Hong Kong, with one of the world's most open economies and a property market that is easy to enter, has low transaction costs and no capital gains tax. That makes the city's housing market a popular target for “hot money” when liquidity enters the global economy, as expected with QE3.
“Due to the launch of QE3 and as the risks of the euro debt crisis calm down, the chance of an overheating asset market in Hong Kong is escalating, so we will introduce suitable measures at the appropriate time,” Norman Chan, chief of the Hong Kong Monetary Authority, told reporters.
“The risk of an overheating property market also suggests a potential asset bubble,” Chan added.
Chan said he did not expect the US measures would put significant pressure on Hong Kong's low interbank interest rates. Hong Kong's interest rates are linked to those in the United States because the Hong Kong dollar is pegged to the greenback.
Chan reiterated that the Hong Kong government had no plan to change the Hong Kong dollar's peg to the US currency.
By Reuters
Friday, September 7, 2012
Hong Kong to restrict foreign homebuyers from 2013
Hong Kong on Thursday announced the first step in a policy aimed to restrict foreigners from buying property, in a move seen to be targeting mainland buyers who have been blamed for pushing up property prices.
Chief executive Leung Chun-ying said only Hong Kong permanent residents will be able to buy flats to be built on two sites that will provide around 1,100 homes next year under a so-called "Hong Kong land for Hong Kong people" policy.
Resale of the residential units will be restricted to locals for 30 years and incorporated companies will also not be allowed to purchase them.
The policy was part of Leung's election promises to tackle the housing woes in the city of seven million before he was elected into office in March.
"Hong Kong's land for property is rare and precious resource, when using this land, we must make it a priority to fulfil the housing needs of the Hong Kong permanent residents," Leung told reporters.
"This plan is the first of its kind because we have never had a policy like this in the past," Leung said while standing in the construction site where the residential buildings will be built.
The units will be built on two sites of the combined size of 1.6 hectares (3.95 acres) in an area that used to be the site of Hong Kong's former Kai Tak airport.
The announcement came after Leung unveiled a series of measures last week to cool the red-hot property market, including to provide around 65,000 new units on the market in the next three to four years.
Other measures include boosting land supply by converting 36 sites meant for government and public use to residential property to provide space for nearly 12,000 units.
Property prices in the southern Chinese city, famous for its sky-high rent, have surged over the past few years due to record low interest rates and the flood of wealthy people from mainland China snapping up homes.
By AFP
Chief executive Leung Chun-ying said only Hong Kong permanent residents will be able to buy flats to be built on two sites that will provide around 1,100 homes next year under a so-called "Hong Kong land for Hong Kong people" policy.
Resale of the residential units will be restricted to locals for 30 years and incorporated companies will also not be allowed to purchase them.
The policy was part of Leung's election promises to tackle the housing woes in the city of seven million before he was elected into office in March.
"Hong Kong's land for property is rare and precious resource, when using this land, we must make it a priority to fulfil the housing needs of the Hong Kong permanent residents," Leung told reporters.
"This plan is the first of its kind because we have never had a policy like this in the past," Leung said while standing in the construction site where the residential buildings will be built.
The units will be built on two sites of the combined size of 1.6 hectares (3.95 acres) in an area that used to be the site of Hong Kong's former Kai Tak airport.
The announcement came after Leung unveiled a series of measures last week to cool the red-hot property market, including to provide around 65,000 new units on the market in the next three to four years.
Other measures include boosting land supply by converting 36 sites meant for government and public use to residential property to provide space for nearly 12,000 units.
Property prices in the southern Chinese city, famous for its sky-high rent, have surged over the past few years due to record low interest rates and the flood of wealthy people from mainland China snapping up homes.
By AFP
Wednesday, May 23, 2012
Far East customers may not get what they want in London property rush
LONDON: When Hong Kong businessman He paid a £35,000 (US$56,000) deposit on a four-bedroom apartment in Britain, he believed it was a 40-minute walk from central London, his lawyer said. In fact it was a 40-minute journey by high-speed train.
The £350,000 home was in Lincolnshire, eastern England. He sued the developer for misrepresentation last year, getting his money back before the case got to court in what his lawyer told Reuters was an attempt by the developer to avoid its marketing material being splashed around a courtroom.
His experience shows the potential pitfalls facing a growing number of Far Eastern people buying British homes unseen as developers target places such as Hong Kong, Shanghai and Singapore because British buyers are struggling to get mortgages.
“It is a matter of developers saying: Here are some people who are likely to be interested. They probably do not know too much about the market, so why don't we advertise there',” said David Eldon, former chairman of HSBC's Asia unit who has witnessed the practice during two decades in Hong Kong.
“I think they are being a little economical with the truth,” he said, adding that properties could be sold for higher prices in the Far East.
Major developers including Barratt, Taylor Wimpey and Berkeley have stepped up efforts to court cash-rich Far Eastern buyers since 2009 after the global financial crisis sapped demand at home. Developers do not all use exactly the same marketing methods.
Berkeley said it had had many repeat purchases from Asian buyers over 20 years, although it acknowledged a mistake in one of its press releases. Taylor Wimpey said it offered a high level of service to all customers. Barratt declined to comment.
The number of Chinese and Pacific Asian buyers of the best quality newly-built London homes jumped to 37% in 2010 from 4% in 2009, data from property consultancy Savills showed. The majority purchase for investment and are used to buying off-plan before the home is built.
He was told his flat was 40 minutes from central London at a face-to-face meeting with the developer, said David Linklater, head of litigation at law firm Alan Broadhurst, who represented He. Broadhurst declined to give his client's full name or the developer's identity.
“Lots of people go to the fairs in Hong Kong and get a sheet of paper with a picture of Big Ben. You think you are going to be the Queen's neighbour when actually the Queen has a great big garden with a big wall around it,” said Linklater, who deals with 20-30 unhappy overseas buyers a year.
Sold at exhibitions in plush hotels, many properties are not in the most desirable London neighbourhoods despite the prominent pictures of Harrods or Buckingham Palace. Details of exact locations tend to be omitted rather than inaccurate.
“There is a lot of embellishment going on working off the naivety of the Chinese buyer,” said James Moss, managing director of property consultancy Curzon Investment Property.
A brochure advertising 375 Kensington High Street, a luxury London scheme marketed in the Far East and developed by a Berkeley joint venture alludes to the proximity of the High Street Kensington underground station in a brochure entitled “London's most sought after new address”.
The station, which is at the heart of one of London's most popular shopping districts, is a 15-20-minute walk away while the flats are at the scruffier end of the same long street and closer to two other tube stations.
In a press release issued in Hong Kong on Friday, the development was described as “a short walk from the luxury shopping available at Harrods.” The world-famous store is a 50-minute walk according to the Transport for London website.
“To an unsuspecting buyer, you think wow, it is amazing, but actually it is the wrong end of Kensington High Street, right next to Kensington Olympia,” said Camilla Dell, managing partner at Black Brick Property Solutions, which helps overseas buyers find London homes.
A Berkeley spokesman said the “short walk” description was “an error.”
“We have had a lot of customers from Asia over the last 20 years, many of whom are repeat purchasers,” he said.
“It (the development) has excellent transport links and easy access to well-known shops; the distances to which are clearly marked in our brochure. In addition, by far the majority of buyers have or will visit our developments before buying.”
By Reuters
Friday, January 6, 2012
HK property market tipped to fall
HONG KONG: The real estate market here is tipped to extend recent falls this year, analysts said yesterday, as property transactions dived to a five-year low in 2011 after a slew of measures to curb prices.
Leaders in the southern Chinese city have been trying to control prices, which have become a major headache for the government amid growing disquiet among its seven million population over the rocketing cost of owning a home.
The government has imposed new taxes and staged a series of land auctions to boost supply and bring down prices - helping to tame one of the world's least-affordable housing markets.
A total of 108,814 properties changed hands in 2011, down 33 per cent from 162,739 a year earlier, according to official data released by the government's land registry yesterday.
The volume was the lowest since 2006, when 99,087 deals were recorded.
"The policies were meant to curb speculating activities but they are now hurting the market," Wong Leung-sing, research head at Centaline, one of the city's largest real estate agencies, said.
He also cited rising mortgage rates and weak global economic sentiment for the fall, but said prices fell only about five per cent on average from their peaks seen in June last year - due to owners' reluctance to sell.
Property prices rose 11 per cent in the first 10 months of last year, Dow Jones Newswires reported, citing government statistics.
Buggle Lau, chief analyst at property broker Midland Holdings, said prices were likely to see a correction this year, and the slowdown could turn worse if global economic sentiment weakened further.
"Prices are likely to remain flat overall, there will be a price adjustment - about five to 10 per cent correction," he said. "If the eurozone debt crisis deteriorates, definitely it will have some overall impact in the market but what is more important will be the Hong Kong government's policies."
Despite the expected slowdown in the secondary home sales market, the primary market is likely to see an uptick with the launch of an estimated 16,000 new housing units this year, Lau said.
"After all we are going to have a new chief executive this year, we are not sure whether the housing policy and some restrictive policies will change," said Lau, referring to Hong Kong's leader Donald Tsang, whose term expires in June.
Wong said authorities should consider relaxing some restrictions to "let the market return to its normal activity".
Property prices in Hong Kong, famous for its sky-high rent and super-rich tycoons, have surged over the past couple of years due to record low interest rates and a flood of wealthy buyers from mainland China.
Following the slew of measures to curb prices, several government land sales last year were below market expectations, suggesting a cool down in the market.
Tsang pledged in October to tackle the city's housing woes, acknowledging that "people have become frustrated" at the difficulty in affording a home.
He also announced the resumption of a subsidised housing scheme for low-income residents, and promised to deliver 17,000 subsidised flats for sale from 2016 to 2019.
By AFP
Leaders in the southern Chinese city have been trying to control prices, which have become a major headache for the government amid growing disquiet among its seven million population over the rocketing cost of owning a home.
The government has imposed new taxes and staged a series of land auctions to boost supply and bring down prices - helping to tame one of the world's least-affordable housing markets.
A total of 108,814 properties changed hands in 2011, down 33 per cent from 162,739 a year earlier, according to official data released by the government's land registry yesterday.
The volume was the lowest since 2006, when 99,087 deals were recorded.
"The policies were meant to curb speculating activities but they are now hurting the market," Wong Leung-sing, research head at Centaline, one of the city's largest real estate agencies, said.
He also cited rising mortgage rates and weak global economic sentiment for the fall, but said prices fell only about five per cent on average from their peaks seen in June last year - due to owners' reluctance to sell.
Property prices rose 11 per cent in the first 10 months of last year, Dow Jones Newswires reported, citing government statistics.
Buggle Lau, chief analyst at property broker Midland Holdings, said prices were likely to see a correction this year, and the slowdown could turn worse if global economic sentiment weakened further.
"Prices are likely to remain flat overall, there will be a price adjustment - about five to 10 per cent correction," he said. "If the eurozone debt crisis deteriorates, definitely it will have some overall impact in the market but what is more important will be the Hong Kong government's policies."
Despite the expected slowdown in the secondary home sales market, the primary market is likely to see an uptick with the launch of an estimated 16,000 new housing units this year, Lau said.
"After all we are going to have a new chief executive this year, we are not sure whether the housing policy and some restrictive policies will change," said Lau, referring to Hong Kong's leader Donald Tsang, whose term expires in June.
Wong said authorities should consider relaxing some restrictions to "let the market return to its normal activity".
Property prices in Hong Kong, famous for its sky-high rent and super-rich tycoons, have surged over the past couple of years due to record low interest rates and a flood of wealthy buyers from mainland China.
Following the slew of measures to curb prices, several government land sales last year were below market expectations, suggesting a cool down in the market.
Tsang pledged in October to tackle the city's housing woes, acknowledging that "people have become frustrated" at the difficulty in affording a home.
He also announced the resumption of a subsidised housing scheme for low-income residents, and promised to deliver 17,000 subsidised flats for sale from 2016 to 2019.
By AFP
Monday, December 19, 2011
HK luxury home rents at 'tipping point'
Hong Kong luxury home rents, which fell last quarter for the first time since mid-2009, may slump 10 percent next year as banks and hedge funds scale back amid the threat of a global recession, according to brokers including Jones Lang LaSalle Inc. and Colliers International.
“We’re definitely at that tipping point,” said Anne-Marie Sage, Hong Kong-based head of residential leasing at Jones Lang, the world’s second-largest commercial brokerage.
“We’ve began to see vacancies at the very top end of the market. The banking and the financial sector have basically stopped all movement.”
By Bloomberg
“We’re definitely at that tipping point,” said Anne-Marie Sage, Hong Kong-based head of residential leasing at Jones Lang, the world’s second-largest commercial brokerage.
“We’ve began to see vacancies at the very top end of the market. The banking and the financial sector have basically stopped all movement.”
By Bloomberg
Wednesday, November 30, 2011
HK plans to get tough with errant developers
HONG KONG: Hong Kong has proposed a new law that will slap fines and jail terms on developers that mislead buyers of new homes.
The government yesterday kicked off a two-month consultation period on the new law, which it hopes to introduce to the Legislative Council in the first quarter of next year.
“There are consumer protections in other areas, and there should be similar protections on selling properties,” Eva Cheng, the secretary for transport and housing, said as she called for improved transparency, as she unveiled the proposed law. “It has to be done, and there is never a better time.”
Cheng said the current slump in property prices in Hong Kong did not affect the government's motivation to put new rules in place. A steering committee has been working on the rule changes over the past year. The new law would govern all first-hand projects, whether completed or sold off-plan.
The maximum penalty for misleading the public would be a fine of HK$5mil and seven years in prison. Minor breaches would be punished by a fine of around HK$100,000.
Under the proposed rules, developers would have to make a sales brochure on each property available at least seven days before sales begin. The brochure would list the property's address and the neighbourhood it is in. The brochure would also have to provide the saleable area of the property, and would not be allowed to contain artist's impressions of the development.
Residential property in Hong Kong has traditionally been priced and promoted based on gross floor area, not the net area. But consumers have complained about misleading practices from developers, who often include an apportionment of public areas such as lift lobbies, electricity plants and clubhouses in the gross floor area of a flat.
Cheng admitted that current legislation on new-home sales was insufficient.
“We agree the current measures are not sufficient,” she said, adding that the new rules were a top priority for her bureau in the coming year.
“The public is rightly concerned about the sale of first-hand properties,” Cheng said.
The saleable area is the floor area of the residential property itself, including any verandah or utility platform, but excluding bay windows and public parts of a development.
Developers would also be required to provide a price list for the development at least three calendar days before it goes on sale. With the government cracking down on property speculation in Hong Kong, transactions have stalled and prices weakened.
Edward Farrelly, the director of research for Hong Kong, Macau and Taiwan at brokerage CBRE, expects residential prices to fall 20% over the next year.
The new rules would have an impact, he said. “I think there's a lot of good in getting more transparency into the market,” he said. “It remains to be seen how the secondary market responds.”
New home prices would likely rise as a result of developers building extra costs into their baseline price, Farrelly said. But they may not be able to push through that kind of increase in the current market.
“Developers will try to resist a major hit on their margin,” Farrelly said. “However, if the market is faced with a downturn, they may have to accept lower margins.”
Andrew Lawrence, the Hong Kong property analyst at Barclays Capital, has forecast a decline of 25% to 30% in Hong Kong property prices, assuming the former British colony pulls off a soft landing. The drop would rise to 35% to 45% in case of a hard landing, Lawrence predicts.
His favorite pick in the sector is Cheung Kong, run by Hong Kong tycoon Li Ka-shing, since the company has been deleveraging its balance sheet over the past 24 months.
That should allow it to buy assets at the bottom of the cycle, Lawrence said. Cheung Kong is Hong Kong's second largest developer by market capitalisation, behind Sun Hung Kai Properties.
By contrast, Sun Hung Kai, the world's second biggest developer by market capitalisation, was relatively highly geared, Lawrence said. It and Henderson Land had the potential to need to issue fresh equity in the future, he said.
By Reuters
The government yesterday kicked off a two-month consultation period on the new law, which it hopes to introduce to the Legislative Council in the first quarter of next year.
“There are consumer protections in other areas, and there should be similar protections on selling properties,” Eva Cheng, the secretary for transport and housing, said as she called for improved transparency, as she unveiled the proposed law. “It has to be done, and there is never a better time.”
Cheng said the current slump in property prices in Hong Kong did not affect the government's motivation to put new rules in place. A steering committee has been working on the rule changes over the past year. The new law would govern all first-hand projects, whether completed or sold off-plan.
The maximum penalty for misleading the public would be a fine of HK$5mil and seven years in prison. Minor breaches would be punished by a fine of around HK$100,000.
Under the proposed rules, developers would have to make a sales brochure on each property available at least seven days before sales begin. The brochure would list the property's address and the neighbourhood it is in. The brochure would also have to provide the saleable area of the property, and would not be allowed to contain artist's impressions of the development.
Residential property in Hong Kong has traditionally been priced and promoted based on gross floor area, not the net area. But consumers have complained about misleading practices from developers, who often include an apportionment of public areas such as lift lobbies, electricity plants and clubhouses in the gross floor area of a flat.
Cheng admitted that current legislation on new-home sales was insufficient.
“We agree the current measures are not sufficient,” she said, adding that the new rules were a top priority for her bureau in the coming year.
“The public is rightly concerned about the sale of first-hand properties,” Cheng said.
The saleable area is the floor area of the residential property itself, including any verandah or utility platform, but excluding bay windows and public parts of a development.
Developers would also be required to provide a price list for the development at least three calendar days before it goes on sale. With the government cracking down on property speculation in Hong Kong, transactions have stalled and prices weakened.
Edward Farrelly, the director of research for Hong Kong, Macau and Taiwan at brokerage CBRE, expects residential prices to fall 20% over the next year.
The new rules would have an impact, he said. “I think there's a lot of good in getting more transparency into the market,” he said. “It remains to be seen how the secondary market responds.”
New home prices would likely rise as a result of developers building extra costs into their baseline price, Farrelly said. But they may not be able to push through that kind of increase in the current market.
“Developers will try to resist a major hit on their margin,” Farrelly said. “However, if the market is faced with a downturn, they may have to accept lower margins.”
Andrew Lawrence, the Hong Kong property analyst at Barclays Capital, has forecast a decline of 25% to 30% in Hong Kong property prices, assuming the former British colony pulls off a soft landing. The drop would rise to 35% to 45% in case of a hard landing, Lawrence predicts.
His favorite pick in the sector is Cheung Kong, run by Hong Kong tycoon Li Ka-shing, since the company has been deleveraging its balance sheet over the past 24 months.
That should allow it to buy assets at the bottom of the cycle, Lawrence said. Cheung Kong is Hong Kong's second largest developer by market capitalisation, behind Sun Hung Kai Properties.
By contrast, Sun Hung Kai, the world's second biggest developer by market capitalisation, was relatively highly geared, Lawrence said. It and Henderson Land had the potential to need to issue fresh equity in the future, he said.
By Reuters
Wednesday, November 16, 2011
IJM brings RM5bil iconic waterfront project to Hong Kong
HONG KONG: IJM Land Bhd's RM5 billion iconic waterfront project in Penang, known as "The Light," is up for grabs at the ongoing MIPIM Asia 2011, the world's premier real estate exhibition and conference, at the Hong Kong Convention and Exhibition Centre.
Located just off the Penang Bridge on the island's eastern coastline, The Light is an integrated project comprising commercial and residential components.
Its chief executive officer and managing director Datuk Soam Heng Choon said: "We are bringing it up to Hong Kong (at MIPIM Asia) where there are more international investors who are looking at it.
"The residential component is on 16.8ha (42 acres) reclaimed land which we launched in 2009. Currently, we've launched four parcels of the residential projects.
"We already commenced reclamation for the commercial projects. We are now ready to go into the market to look for investors," he told BERNAMA on the sidelines of MIPIM Asia 2011, here.
MIPIM Asia 2011, which began yesterday, was opened by Hong Kong's secretary for development, Carrie Lam Cheng Yuet-ngor.
The three-day event will end tomorrow.
In the commercial component, Soam said the total land hectarage was about 42 hectares (105acres) comprising hotels, a business park, convention centre, shopping complex and a performing arts and cultural centre.
He said the first phase of the residential component was under construction.
"We've launched (the residential component) and was mostly sold to Penangites.
"This project will take 10 years (to complete). This, however, depends on how fast we can go. If we can get investors to come in to partner us in some of the commercial projects, this can go very fast, may be in the next five to eight years, it will be completed, he said.
Soam said IJM Land was not desperately looking for investors, however,"we are just looking for people who may be interested because we've already got a lot of interest and investors who are already there but there may be additional people who are also interested as well."
Back home, he said: "We've our local and also Singaporean funds looking at investing in this place as well."
"We came here to specifically network and showcase The Light project. So, we need to be more focused and today we are here to focus on The Light," he added.
IJM Land, with projects in Penang, Klang Valley, Johor, Sabah (in Kota Kinabalu and Sandakan) and Sarawak (Kuching), is among the Malaysian participants at MIPIM Asia 2011 being held at the Malaysian Pavilion.
The Malaysian Pavilion was initiated by Malaysia Property Inc, a Malaysian government initiative that acts as a "bridge" between institutions and corporate and private investors to real estate investment opportunities in Malaysia.
By Bernama
Located just off the Penang Bridge on the island's eastern coastline, The Light is an integrated project comprising commercial and residential components.
Its chief executive officer and managing director Datuk Soam Heng Choon said: "We are bringing it up to Hong Kong (at MIPIM Asia) where there are more international investors who are looking at it.
"The residential component is on 16.8ha (42 acres) reclaimed land which we launched in 2009. Currently, we've launched four parcels of the residential projects.
"We already commenced reclamation for the commercial projects. We are now ready to go into the market to look for investors," he told BERNAMA on the sidelines of MIPIM Asia 2011, here.
MIPIM Asia 2011, which began yesterday, was opened by Hong Kong's secretary for development, Carrie Lam Cheng Yuet-ngor.
The three-day event will end tomorrow.
In the commercial component, Soam said the total land hectarage was about 42 hectares (105acres) comprising hotels, a business park, convention centre, shopping complex and a performing arts and cultural centre.
He said the first phase of the residential component was under construction.
"We've launched (the residential component) and was mostly sold to Penangites.
"This project will take 10 years (to complete). This, however, depends on how fast we can go. If we can get investors to come in to partner us in some of the commercial projects, this can go very fast, may be in the next five to eight years, it will be completed, he said.
Soam said IJM Land was not desperately looking for investors, however,"we are just looking for people who may be interested because we've already got a lot of interest and investors who are already there but there may be additional people who are also interested as well."
Back home, he said: "We've our local and also Singaporean funds looking at investing in this place as well."
"We came here to specifically network and showcase The Light project. So, we need to be more focused and today we are here to focus on The Light," he added.
IJM Land, with projects in Penang, Klang Valley, Johor, Sabah (in Kota Kinabalu and Sandakan) and Sarawak (Kuching), is among the Malaysian participants at MIPIM Asia 2011 being held at the Malaysian Pavilion.
The Malaysian Pavilion was initiated by Malaysia Property Inc, a Malaysian government initiative that acts as a "bridge" between institutions and corporate and private investors to real estate investment opportunities in Malaysia.
By Bernama
Tuesday, October 25, 2011
HK office space still costliest
HONG KONG: Hong Kong continues to be the most expensive place in the world to rent office space, according to research from a property brokerage.
And despite an expected slowdown over the next 12 months, Hong Kong would likely retain its world-leading position, Colliers International said yesterday.
Hong Kong again topped the rankings for the world’s most expensive cities to rent office space, ahead of London’s West End, Paris, Tokyo and the City of London, according to Colliers.
By Reuters
And despite an expected slowdown over the next 12 months, Hong Kong would likely retain its world-leading position, Colliers International said yesterday.
Hong Kong again topped the rankings for the world’s most expensive cities to rent office space, ahead of London’s West End, Paris, Tokyo and the City of London, according to Colliers.
By Reuters
Saturday, July 30, 2011
HK billionaires told to move gates closer to their homes
HONG KONG: Hong Kong's billionaires are finding it harder to buy peace and quiet these days.
After years of turning a blind eye, the government this month issued regulations demanding tycoons move the imposing gates of their luxurious estates closer to home, and out of publicly-owned land such as that lining the roads in this space starved city of seven million people.
Those affected by the order include Macau casino magnate Stanley Ho and Peter Woo, chairman of property and infrastructure focused Wharf Holdings.
“We consider it as a breach of the land lease,” said Teresa Sair of the Lands Department.
The Hong Kong authorities appear to be on a drive to appease an increasingly agitated public, frustrated with soaring property prices and the government's cozy relationship with major property developers.
Over the past few months, government officials have targeted individuals who have built houses with “illegal structures” on public land. Lawmakers have also been lambasted for erecting rooftop glasshouses on their homes without permits.
Now the billionaires are taking a hit. The government had set a July 27 deadline for the removal of the offending gates, but the South China Morning Post reported that only two of six targeted tycoons have obliged, or shown a willingness to do so.
The paper said that Woo, of Wharf Holdings, is one of the tycoons who is making preparations to remove gates at his two estates in Sheko, an exclusive beach side district in Hong Kong located on the south side of the island.
Gambling kingpin Ho, however, has yet to comply with the order, as has Sino Land chairman Robert Ng, Central Development's chairman Hui Saifun, and Tong Yunkai, president of the Confucian Academy, the paper added.
By Reuters
After years of turning a blind eye, the government this month issued regulations demanding tycoons move the imposing gates of their luxurious estates closer to home, and out of publicly-owned land such as that lining the roads in this space starved city of seven million people.
Those affected by the order include Macau casino magnate Stanley Ho and Peter Woo, chairman of property and infrastructure focused Wharf Holdings.
“We consider it as a breach of the land lease,” said Teresa Sair of the Lands Department.
The Hong Kong authorities appear to be on a drive to appease an increasingly agitated public, frustrated with soaring property prices and the government's cozy relationship with major property developers.
Over the past few months, government officials have targeted individuals who have built houses with “illegal structures” on public land. Lawmakers have also been lambasted for erecting rooftop glasshouses on their homes without permits.
Now the billionaires are taking a hit. The government had set a July 27 deadline for the removal of the offending gates, but the South China Morning Post reported that only two of six targeted tycoons have obliged, or shown a willingness to do so.
The paper said that Woo, of Wharf Holdings, is one of the tycoons who is making preparations to remove gates at his two estates in Sheko, an exclusive beach side district in Hong Kong located on the south side of the island.
Gambling kingpin Ho, however, has yet to comply with the order, as has Sino Land chairman Robert Ng, Central Development's chairman Hui Saifun, and Tong Yunkai, president of the Confucian Academy, the paper added.
By Reuters
Friday, May 27, 2011
Tycoon Li Kashing firm buying malls in Malaysia
PETALING JAYA: Singapore-based ARA Asset Management Ltd, which is linked to Hong Kong tycoon Li Kashing, is in different stages of negotiation to buy between five and 10 malls throughout Malaysia.
Its CEO (ARA private funds) and director (corporate office) Ng Beng Tiong said its second Asia Dragon Fund has a fund size of US$1bil to buy Asian assets. Its first Asia Dragon Fund has a fund size of US$1.1bil. ADF is the flagship private real estate fund of ARA.
ARA Asset Management is an affiliate of Hong Kong's Cheung Kong Group, which is controlled by Li.
ARA was set up in 2002 when Li and its other founder, John Lim of Singapore, came together at a time when Cheung Kong was primarily a conglomerate focusing on buying and selling land for development. From a zero base, ARA currently has assets in Singapore, Hong Kong and China exceeding RM44bil in value.
“We don't want to set a limit but we do have a country limit. Nevertheless, that is a lot of firepower given the size of the fund,” said Ng yesterday, adding that they were at different stages of negotiations.
He was in Malaysia to launch 1 Mont'Kiara Mall (1MK), which was purchased by the Cheung Kong Group last year for about RM333mil.
This will be ARA's third property, the other two being the AEON Mall in Malacca and Summit in Subang Jaya.
Ng said they liked well-located community malls which serves the upper middle-class group, with single ownership and management.
“We like community malls because they serve a local need. In that sense, they are stable and defensive. We are also prepared to buy older malls and refurbish them,” he said.
Ng said ARA was looking for economies of scale and they had not limited themselves to just the Klang Valley. Instead, they are considering having assets throughout Malaysia as there is always the possibility of tenants following them. He said there were looking at a risk-return profile with an upper limit of an internal rate of return of about 20%.
“This is an opportunistic fund, meaning we are looking at buying assets at a higher risk, which brings with it a higher return,” Ng said.
In the case of 1MK, it was under construction when the Cheung Kong Group bought it. “We saw the potential and we liked the location. We put in a lot of hard work, brought in the tenants, did the advertising and promotion, and today it is about 60% tenanted. By the end of the year, it will be about 90% tenanted. In three to five years, this mall will be stable and we will have achieved our rate of returns.
ARA has 25 malls throughout Asia 14 in Hong Kong, four each in China and Singapore and three in Malaysia.
Its primary business includes real estate investments trusts, private funds and real estate management services.
By The Star
Its CEO (ARA private funds) and director (corporate office) Ng Beng Tiong said its second Asia Dragon Fund has a fund size of US$1bil to buy Asian assets. Its first Asia Dragon Fund has a fund size of US$1.1bil. ADF is the flagship private real estate fund of ARA.
ARA Asset Management is an affiliate of Hong Kong's Cheung Kong Group, which is controlled by Li.
ARA was set up in 2002 when Li and its other founder, John Lim of Singapore, came together at a time when Cheung Kong was primarily a conglomerate focusing on buying and selling land for development. From a zero base, ARA currently has assets in Singapore, Hong Kong and China exceeding RM44bil in value.
“We don't want to set a limit but we do have a country limit. Nevertheless, that is a lot of firepower given the size of the fund,” said Ng yesterday, adding that they were at different stages of negotiations.
He was in Malaysia to launch 1 Mont'Kiara Mall (1MK), which was purchased by the Cheung Kong Group last year for about RM333mil.
This will be ARA's third property, the other two being the AEON Mall in Malacca and Summit in Subang Jaya.
Ng said they liked well-located community malls which serves the upper middle-class group, with single ownership and management.
“We like community malls because they serve a local need. In that sense, they are stable and defensive. We are also prepared to buy older malls and refurbish them,” he said.
Ng said ARA was looking for economies of scale and they had not limited themselves to just the Klang Valley. Instead, they are considering having assets throughout Malaysia as there is always the possibility of tenants following them. He said there were looking at a risk-return profile with an upper limit of an internal rate of return of about 20%.
“This is an opportunistic fund, meaning we are looking at buying assets at a higher risk, which brings with it a higher return,” Ng said.
In the case of 1MK, it was under construction when the Cheung Kong Group bought it. “We saw the potential and we liked the location. We put in a lot of hard work, brought in the tenants, did the advertising and promotion, and today it is about 60% tenanted. By the end of the year, it will be about 90% tenanted. In three to five years, this mall will be stable and we will have achieved our rate of returns.
ARA has 25 malls throughout Asia 14 in Hong Kong, four each in China and Singapore and three in Malaysia.
Its primary business includes real estate investments trusts, private funds and real estate management services.
By The Star
Wednesday, January 26, 2011
HK has world's least affordable housing: survey
Hong Kong has the world's least affordable housing, according to an international survey, a finding that is sure to stoke anger among many residents already fed up with runaway property prices.
Buying a home in the Asian financial hub, synonymous with its super-rich tycoons and glittering financial district, costs more than 11 times the city's average salary, outpacing London, New York and other major cities, US-based consulting firm Demographia said in a report released Monday.
Sydney was ranked the second-least affordable major city, followed by Vancouver, and Melbourne.
The 7th Annual International Housing Affordability Survey compared home prices and household income in 325 cities in Australia, Canada, Hong Kong, Ireland, New Zealand, Britain and the United States.
It was the first time Hong Kong has been included in the survey.Hong Kong's median home prices in the third quarter of 2010 averaged HK$2.58 million ($330,939), about 11.4 times the median household annual income of HK$225,400.
The most affordable homes in the survey were all in the US and Canada, with Saginaw in the US state of Michigan being the most affordable city, where the median house price was $61,400.
Atlanta was the most affordable major city, where the median house price was $129,400.Rising property prices have become a major concern for Hong Kong's population of seven million.
Worries about a property bubble have prompted Hong Kong's government to announce a series of cooling measures, including boosting land supply and new stamp duties to keep out hot money.
Home prices in Hong Kong have risen 50 percent over the past two years, due to low interest rates, a robust economy and an influx of buyers from mainland China, who account for a big portion of purchases, especially for luxury homes.
Buggle Lau, chief analyst at Hong Kong property broker Midland Holdings, said he expected home prices to continue to surge in 2011, but he questioned the Demographia survey's methodology.
"The survey does not take into account more affordable housing in Hong Kong, like government housing," he said.
By AFP
Buying a home in the Asian financial hub, synonymous with its super-rich tycoons and glittering financial district, costs more than 11 times the city's average salary, outpacing London, New York and other major cities, US-based consulting firm Demographia said in a report released Monday.
Sydney was ranked the second-least affordable major city, followed by Vancouver, and Melbourne.
The 7th Annual International Housing Affordability Survey compared home prices and household income in 325 cities in Australia, Canada, Hong Kong, Ireland, New Zealand, Britain and the United States.
It was the first time Hong Kong has been included in the survey.Hong Kong's median home prices in the third quarter of 2010 averaged HK$2.58 million ($330,939), about 11.4 times the median household annual income of HK$225,400.
The most affordable homes in the survey were all in the US and Canada, with Saginaw in the US state of Michigan being the most affordable city, where the median house price was $61,400.
Atlanta was the most affordable major city, where the median house price was $129,400.Rising property prices have become a major concern for Hong Kong's population of seven million.
Worries about a property bubble have prompted Hong Kong's government to announce a series of cooling measures, including boosting land supply and new stamp duties to keep out hot money.
Home prices in Hong Kong have risen 50 percent over the past two years, due to low interest rates, a robust economy and an influx of buyers from mainland China, who account for a big portion of purchases, especially for luxury homes.
Buggle Lau, chief analyst at Hong Kong property broker Midland Holdings, said he expected home prices to continue to surge in 2011, but he questioned the Demographia survey's methodology.
"The survey does not take into account more affordable housing in Hong Kong, like government housing," he said.
By AFP
Saturday, November 20, 2010
Hong Kong announces measures to cool property mart
HONG KONG: Hong Kong's government on Friday unveiled its latest attempt to cool the red-hot property market, amid public anger at spiralling prices and fears highlighted by the IMF of a real estate bubble.
Financial Secretary John Tsang announced a sliding scale of new stamp duties to take effect midnight Friday aimed at restraining what he called "short-term speculative" inflows into the glitzy financial hub's property market.
"These are extraordinary measures under exceptional circumstances. Our aim is to curb short-term speculative activities and to reduce the risk of any asset bubble," Tsang told journalists.
The densely populated city of seven million is famous for its sky-high residential rents and super-rich tycoons. It notably attracts wealthy buyers from mainland China looking for a relatively safe place to invest with high living standards.
But the International Monetary Fund this week urged Hong Kong to rein in soaring prices, amid fears that overheating is spreading from high-end luxury properties to the general market.
Under the levies outlined by Tsang, anyone reselling a property within six months of purchase would be subject to a hefty 15 per cent stamp duty. A 10 per cent duty would apply to sales within six-to-12 months and five per cent to sales within 12-24 months.
Luxury home values in the former British colony recently topped their pre-1997 Asian financial crisis peak, according to government data released in October.
Friday's announcement marks the latest in a series of measures already taken to cool the ever-expanding market.
Stamp duty on luxury property was hiked by half a percentage point in April to 4.25 per cent, while a number of government land auctions have been held to increase supply.
But prices have crept ever higher, and are up 20 per cent in the past year.
The IMF warned in a report on Thursday that, "depending on the amplitude of the upswing, the resulting downturn could prove both protracted and painful".
Concerns have been amplified after the Federal Reserve unveiled a massive stimulus package to kick-start the US economy, raising fears that a flood of speculative money could overheat Hong Kong's volatile asset markets.
The Hong Kong dollar is tied to the greenback, although the IMF reiterated its support for the city's currency system, calling it a "robust anchor of monetary and financial stability".
Earlier this month, the city's biggest realtor, Centaline, recorded the highest commercial property price per square foot in Hong Kong's history.
A 79th floor unit in The Centre - a downtown skyscraper owned by Hong Kong's richest man Li Ka-shing - sold for HK$338 million (US$44 million), or about HK$25,580 a square foot.
Homes with a price tag of at least HK$20 million have surpassed previous highs for both the number of transactions and total sale proceeds, Centaline also said.
Spillover into the lower-end property market, where the vast majority of Hong Kong people live, has seen prices creep ever further beyond the reach of average incomes.
In October, Hong Kong's leader announced a halt to automatic residency for wealthy property buyers, in a move that analysts said was aimed squarely at cash-rich investors from mainland China.
At a rowdy legislative session that was dogged by about 200 protestors denouncing high property prices, Chief Executive Donald Tsang said: "Housing is currently the greatest concern of our people."
By AFP
Financial Secretary John Tsang announced a sliding scale of new stamp duties to take effect midnight Friday aimed at restraining what he called "short-term speculative" inflows into the glitzy financial hub's property market.
"These are extraordinary measures under exceptional circumstances. Our aim is to curb short-term speculative activities and to reduce the risk of any asset bubble," Tsang told journalists.
The densely populated city of seven million is famous for its sky-high residential rents and super-rich tycoons. It notably attracts wealthy buyers from mainland China looking for a relatively safe place to invest with high living standards.
But the International Monetary Fund this week urged Hong Kong to rein in soaring prices, amid fears that overheating is spreading from high-end luxury properties to the general market.
Under the levies outlined by Tsang, anyone reselling a property within six months of purchase would be subject to a hefty 15 per cent stamp duty. A 10 per cent duty would apply to sales within six-to-12 months and five per cent to sales within 12-24 months.
Luxury home values in the former British colony recently topped their pre-1997 Asian financial crisis peak, according to government data released in October.
Friday's announcement marks the latest in a series of measures already taken to cool the ever-expanding market.
Stamp duty on luxury property was hiked by half a percentage point in April to 4.25 per cent, while a number of government land auctions have been held to increase supply.
But prices have crept ever higher, and are up 20 per cent in the past year.
The IMF warned in a report on Thursday that, "depending on the amplitude of the upswing, the resulting downturn could prove both protracted and painful".
Concerns have been amplified after the Federal Reserve unveiled a massive stimulus package to kick-start the US economy, raising fears that a flood of speculative money could overheat Hong Kong's volatile asset markets.
The Hong Kong dollar is tied to the greenback, although the IMF reiterated its support for the city's currency system, calling it a "robust anchor of monetary and financial stability".
Earlier this month, the city's biggest realtor, Centaline, recorded the highest commercial property price per square foot in Hong Kong's history.
A 79th floor unit in The Centre - a downtown skyscraper owned by Hong Kong's richest man Li Ka-shing - sold for HK$338 million (US$44 million), or about HK$25,580 a square foot.
Homes with a price tag of at least HK$20 million have surpassed previous highs for both the number of transactions and total sale proceeds, Centaline also said.
Spillover into the lower-end property market, where the vast majority of Hong Kong people live, has seen prices creep ever further beyond the reach of average incomes.
In October, Hong Kong's leader announced a halt to automatic residency for wealthy property buyers, in a move that analysts said was aimed squarely at cash-rich investors from mainland China.
At a rowdy legislative session that was dogged by about 200 protestors denouncing high property prices, Chief Executive Donald Tsang said: "Housing is currently the greatest concern of our people."
By AFP
Wednesday, October 13, 2010
HK luxury property market rosy, say experts
HONG KONG: The latest government land auction, a site in the Kowloon Tong district in Hong Kong, has fetched a higher-than-expected price at US$210 million.
Analysts said the price reflected optimism about luxury property prices in Hong Kong and expected that the government would not be raising curbs on property speculation.
Two developers had earlier bid for the site: Robert Kuok's listed Kerry Properties, which owned an adjacent site and unlisted ChinaChem Group, the property empire of the late Nina Wang.
ChinaChem eventually won with a bid of US$210 million - 55 per cent higher than the opening price, and exceeding expectations.
By AFP
Analysts said the price reflected optimism about luxury property prices in Hong Kong and expected that the government would not be raising curbs on property speculation.
Two developers had earlier bid for the site: Robert Kuok's listed Kerry Properties, which owned an adjacent site and unlisted ChinaChem Group, the property empire of the late Nina Wang.
ChinaChem eventually won with a bid of US$210 million - 55 per cent higher than the opening price, and exceeding expectations.
By AFP
Monday, October 11, 2010
China's tightening moves to speed up property sales
HONG KONG: China's series of policy tightening measures to prevent a property bubble from bursting will likely speed up sales of some projects as prices in top tier cities fall, analysts and industry executives said on Monday, Oct 11.
Since April, China has announced a range of measures to curb the sector that is in danger of overheating, including raising downpayments for home purchases and requiring banks to conduct stress tests in case of sharp housing price declines.
Earlier on Monday, sources told Reuters China has raised reserve requirements for six large commercial banks by 50 basis points on a temporary basis, a surprise move to drain cash from the economy, but avoid over-tightening.
"Some developers would speed up project sales from the second half of this year to the first half next year so as to reduce their reliance on loans from banks with the government's measures to reduce liquidity," Evergrande Chief Executive James Xia told a news conference on Monday.
Last week, Shanghai issued new rules to limit home buyers to one new apartment and will impose a revised land appreciation tax. A newspaper also reported that Shenzhen would prohibit local families from buying a third home and those who don't pay local taxes would be barred from buying any unit.
PROPERTY TAX EXPECTED
China will likely introduce a property tax on a trial basis to further clamp down speculation in the sector, especially in first tier cities where prices remain high, though the market is mixed on when the tax might be launched.
Xia said there was a slim possibility that the trial property tax would be introduced this year, though Nie Meisheng, president of the semi-official China Real Estate Chamber of Commerce, told a forum in Beijing earlier on Monday that it would be launched in months.
With the government's series of measures announced this year to cool the property sector, housing prices in top-tier Chinese cities will probably fall by 10 percent over the next 6-12 months, ratings agency Standard & Poor's said.
China's housing prices in top cities, such as Shanghai, Guangzhou and Shenzhen, had fallen by about 10 percent as of the end of August from a peak in April, before the impact of tightening measures started to have a negative impact on the market, S&P credit analyst Bei Fu said.
"We expect such corrections to deepen in the next 6-12 months," Fu said in a media teleconference after the ratings agency issued a report on China's property sector, although she added that the corrections would not be as sharp as in 2008.
"In 2008, we've actually seen probably a 20, 30 percent downward correction in a timeframe of six to nine months. So this time, it's going to more moderate, kind of gradual downward adjustment," she said. Some analysts expect the impact of tightening moves impacting the property market for several months to come.
"We are not so optimistic on the short-term, believing that the government will not easily surrender its current tightening efforts, which have a lagging effect, and will be felt more acutely in the first half of next year," said Wee Liat Lee, regional head of property at Samsung Securities.
By Reuters
Since April, China has announced a range of measures to curb the sector that is in danger of overheating, including raising downpayments for home purchases and requiring banks to conduct stress tests in case of sharp housing price declines.
Earlier on Monday, sources told Reuters China has raised reserve requirements for six large commercial banks by 50 basis points on a temporary basis, a surprise move to drain cash from the economy, but avoid over-tightening.
"Some developers would speed up project sales from the second half of this year to the first half next year so as to reduce their reliance on loans from banks with the government's measures to reduce liquidity," Evergrande Chief Executive James Xia told a news conference on Monday.
Last week, Shanghai issued new rules to limit home buyers to one new apartment and will impose a revised land appreciation tax. A newspaper also reported that Shenzhen would prohibit local families from buying a third home and those who don't pay local taxes would be barred from buying any unit.
PROPERTY TAX EXPECTED
China will likely introduce a property tax on a trial basis to further clamp down speculation in the sector, especially in first tier cities where prices remain high, though the market is mixed on when the tax might be launched.
Xia said there was a slim possibility that the trial property tax would be introduced this year, though Nie Meisheng, president of the semi-official China Real Estate Chamber of Commerce, told a forum in Beijing earlier on Monday that it would be launched in months.
With the government's series of measures announced this year to cool the property sector, housing prices in top-tier Chinese cities will probably fall by 10 percent over the next 6-12 months, ratings agency Standard & Poor's said.
China's housing prices in top cities, such as Shanghai, Guangzhou and Shenzhen, had fallen by about 10 percent as of the end of August from a peak in April, before the impact of tightening measures started to have a negative impact on the market, S&P credit analyst Bei Fu said.
"We expect such corrections to deepen in the next 6-12 months," Fu said in a media teleconference after the ratings agency issued a report on China's property sector, although she added that the corrections would not be as sharp as in 2008.
"In 2008, we've actually seen probably a 20, 30 percent downward correction in a timeframe of six to nine months. So this time, it's going to more moderate, kind of gradual downward adjustment," she said. Some analysts expect the impact of tightening moves impacting the property market for several months to come.
"We are not so optimistic on the short-term, believing that the government will not easily surrender its current tightening efforts, which have a lagging effect, and will be felt more acutely in the first half of next year," said Wee Liat Lee, regional head of property at Samsung Securities.
By Reuters
Monday, October 4, 2010
Cemetery site scares off Hong Kong developers
Hong Kong axed its first land auction in 16 years last week after property-mad developers were scared off by the site's location -- next to a cemetery, considered a bad omen by Chinese buyers.
Soaring property prices have sent the financial hub's government into action over the past year, staging half a dozen land sales to boost supply and cool an overheating market amid fears of a housing-price bubble.
The land sales sparked huge interest from buyers, including Hong Kong's richest man Li Ka-shing, given the scarcity of real estate in this densely populated city of seven million.
But the cemetery plot, about 20 minutes' drive from Hong Kong's glittering financial district, was deemed too spooky for the highly superstitious Chinese.
"It's very unusual -- there is always a shortage of land in Hong Kong," said Alnwick Chan, executive director at property consultancy Knight Frank.
"But the (building) would overlook cemeteries.
That is quite an issue for the Chinese population.
It has perceived bad luck and would always have this haunted feeling."The site is surrounded by cemeteries and tombstone workshops, a far cry from Hong Kong's highly prized views of the South China Sea or emerald green hills.
Auctioneers pulled the site after just a few minutes on Tuesday with the plot failing to draw even one bid for its 530 million Hong Kong dollars (68 million US dollars) opening price.
Surveyors had estimated it might fetch as much as 780 million Hong Kong dollars.
On the same day, a site in the city's outlying New Territories fetched a higher-than-expected 459 million Hong Kong dollars, throwing cold water on any suggestion that Hong Kong's property market is softening.
"I believe it's an isolated incident," Buggle Lau, chief analyst at Hong Kong property broker Midland Holdings, said of the failed sale.
"The other site received an overwhelming response.
"The aborted sale was Hong Kong's first since 1994, when a plot of land was also pulled off the auction block after garnering zero interest.
The cemetery site's close proximity to a slope would also hike developers' costs, while its location in a middle-income district might hamper demand for flats in a high-margin luxury building, Lau told AFP.
Worst of all, the upper floors -- which usually fetch the highest prices -- would have the clearest view of the vast cemeteries, he added.
Mainland Chinese buyers, who account for as much as half of the luxury residential sales in Hong Kong, would shy away from investing in the unlucky property, said Yu Kam-hung, a senior managing director at CB Richard Ellis.
"The marketability would be limited," he told AFP.
In August, billionaire tycoon Li snapped up two prime residential sites for a combined 7.61 billion Hong Kong dollars -- well above market estimates.
Developers have remained upbeat about Hong Kong's residential market despite government measures to rein in prices, including boosting land supply and tightening mortgage lending.
Hong Kong house prices have surged nearly 45 percent from their trough at the end of 2008, while prices of some luxury flats have returned to, or surpassed, the peaks of the 1997 property boom.
By AFP
Soaring property prices have sent the financial hub's government into action over the past year, staging half a dozen land sales to boost supply and cool an overheating market amid fears of a housing-price bubble.
The land sales sparked huge interest from buyers, including Hong Kong's richest man Li Ka-shing, given the scarcity of real estate in this densely populated city of seven million.
But the cemetery plot, about 20 minutes' drive from Hong Kong's glittering financial district, was deemed too spooky for the highly superstitious Chinese.
"It's very unusual -- there is always a shortage of land in Hong Kong," said Alnwick Chan, executive director at property consultancy Knight Frank.
"But the (building) would overlook cemeteries.
That is quite an issue for the Chinese population.
It has perceived bad luck and would always have this haunted feeling."The site is surrounded by cemeteries and tombstone workshops, a far cry from Hong Kong's highly prized views of the South China Sea or emerald green hills.
Auctioneers pulled the site after just a few minutes on Tuesday with the plot failing to draw even one bid for its 530 million Hong Kong dollars (68 million US dollars) opening price.
Surveyors had estimated it might fetch as much as 780 million Hong Kong dollars.
On the same day, a site in the city's outlying New Territories fetched a higher-than-expected 459 million Hong Kong dollars, throwing cold water on any suggestion that Hong Kong's property market is softening.
"I believe it's an isolated incident," Buggle Lau, chief analyst at Hong Kong property broker Midland Holdings, said of the failed sale.
"The other site received an overwhelming response.
"The aborted sale was Hong Kong's first since 1994, when a plot of land was also pulled off the auction block after garnering zero interest.
The cemetery site's close proximity to a slope would also hike developers' costs, while its location in a middle-income district might hamper demand for flats in a high-margin luxury building, Lau told AFP.
Worst of all, the upper floors -- which usually fetch the highest prices -- would have the clearest view of the vast cemeteries, he added.
Mainland Chinese buyers, who account for as much as half of the luxury residential sales in Hong Kong, would shy away from investing in the unlucky property, said Yu Kam-hung, a senior managing director at CB Richard Ellis.
"The marketability would be limited," he told AFP.
In August, billionaire tycoon Li snapped up two prime residential sites for a combined 7.61 billion Hong Kong dollars -- well above market estimates.
Developers have remained upbeat about Hong Kong's residential market despite government measures to rein in prices, including boosting land supply and tightening mortgage lending.
Hong Kong house prices have surged nearly 45 percent from their trough at the end of 2008, while prices of some luxury flats have returned to, or surpassed, the peaks of the 1997 property boom.
By AFP
Wednesday, September 1, 2010
HK land sale price surpasses estimates
HONG KONG: Hong Kong sold a piece of land yesterday at a price that was a third above forecasts, indicating that the Chinese territory’s property sector could still be frothy even after cooling measures were announced weeks ago.
The government has been selling land at higher-than-expected prices over the past few auctions as demand for posh apartments has been holding up well in Hong Kong due to low interest rates, purchases from rich Chinese and Asia’s strong economy.
By Reuters
The government has been selling land at higher-than-expected prices over the past few auctions as demand for posh apartments has been holding up well in Hong Kong due to low interest rates, purchases from rich Chinese and Asia’s strong economy.
By Reuters
Saturday, August 14, 2010
HK moves to curb property bubble
HONG KONG: Hong Kong’s government said yesterday it will increase land supply to avoid a property bubble, warning that prices of some flats are approaching historic highs.
John Tsang, the city’s financial secretary, said prices in June were 8 per cent up from the end of 2009, despite a series of measures the government introduced in April to cool the overheating market.
By Business Times
John Tsang, the city’s financial secretary, said prices in June were 8 per cent up from the end of 2009, despite a series of measures the government introduced in April to cool the overheating market.
By Business Times
Tuesday, August 3, 2010
HK property prices set to rise another 15pc
HONG KONG: Hong Kong home prices will rise another 15 per cent in the next 12 months as limited supply forces buyers to pay more for property that’s already expensive, CLSA Ltd’s Nicole Wong said.
Prices will increase because the city’s promising job market and growing wealth will help drive demand for real estate while supply doesn’t increase much, Wong, the regional head of property research for CLSA, said at a media briefing yesterday .
“Is Hong Kong real estate too expensive? Definitely,” Wong said.
By Bloomberg
Prices will increase because the city’s promising job market and growing wealth will help drive demand for real estate while supply doesn’t increase much, Wong, the regional head of property research for CLSA, said at a media briefing yesterday .
“Is Hong Kong real estate too expensive? Definitely,” Wong said.
By Bloomberg
Thursday, June 10, 2010
Sun Hung Kai's HK$10.9b land buy beats estimates
HONG KONG: Sun Hung Kai Properties Ltd, the world's biggest developer by market value, paid HK$10.9 billion (HK$100 = RM42.61) for a residential site at a public auction in Hong Kong, beating estimates and underscoring that luxury home demand is withstanding government efforts to cool the market.
The Ho Man Tin district site was estimated at HK$8.41 billion, according to the median of seven analysts surveyed by Bloomberg News.
At HK$12,540 a square foot, it is the highest price in urban Hong Kong since its property market peaked in 1997, according to Centaline Property Agency Ltd.
Home prices have risen 41 percent since the end of 2008, prompting the government to tighten down-payment requirements for luxury homes in October to curtail speculation after record- low interest rates fueled the surge.
The Hang Seng Property Index, tracking six of Hong Kong's biggest develo pers, closed 1.8 per cent higher, reversing a 0.1 per cent drop.
"The above-expectations bidding price shows that the developers hold a positive outlook on urban sites for luxury homes, as currently it is obvious the supply for luxury homes is not sufficient," Wong Leung-sing, an associate director of research at Centaline, one of the city's biggest real estate agencies, said by phone yesterday.
The Centa-City Index, a measure of Hong Kong's home prices, last week fell 1.44 per cent, its biggest weekly drop in over 18 months, after the government's May 12 pledge to keep boosting land supply to cool the market. Hong Kong may add as many as 60,000 homes in three to four years, Financial Secretary John Tsang said on Wednesday.
The price "was not cheap but still reasonable," Fiona Wan, a spokeswoman at Sun Hung Kai, said by phone yesterday.
The firm expects to invest HK$18 billion to develop the site "into a luxurious residential area." The estimates ranged from HK$7.15 billion to HK$9.8 billion.
Home prices in Hong Kong rose the most among the world's major markets in the fourth quarter, property adviser Knight Frank LLP said in April.
Average prices climbed almost 28 per cent from a year earlier in Hong Kong, while in China they advanced 25 per cent, a global index compiled by the London-based broker showed. They rose 3.4 per cent in the UK and fell 3.1 per cent in the US, according to the April 21 survey.
Luxury home prices may rise 20 per cent this year as the economy expands and supply remains limited, real estate broker CB Richard Ellis Group Inc said in January.
By Bloomberg
The Ho Man Tin district site was estimated at HK$8.41 billion, according to the median of seven analysts surveyed by Bloomberg News.
At HK$12,540 a square foot, it is the highest price in urban Hong Kong since its property market peaked in 1997, according to Centaline Property Agency Ltd.
Home prices have risen 41 percent since the end of 2008, prompting the government to tighten down-payment requirements for luxury homes in October to curtail speculation after record- low interest rates fueled the surge.
The Hang Seng Property Index, tracking six of Hong Kong's biggest develo pers, closed 1.8 per cent higher, reversing a 0.1 per cent drop.
"The above-expectations bidding price shows that the developers hold a positive outlook on urban sites for luxury homes, as currently it is obvious the supply for luxury homes is not sufficient," Wong Leung-sing, an associate director of research at Centaline, one of the city's biggest real estate agencies, said by phone yesterday.
The Centa-City Index, a measure of Hong Kong's home prices, last week fell 1.44 per cent, its biggest weekly drop in over 18 months, after the government's May 12 pledge to keep boosting land supply to cool the market. Hong Kong may add as many as 60,000 homes in three to four years, Financial Secretary John Tsang said on Wednesday.
The price "was not cheap but still reasonable," Fiona Wan, a spokeswoman at Sun Hung Kai, said by phone yesterday.
The firm expects to invest HK$18 billion to develop the site "into a luxurious residential area." The estimates ranged from HK$7.15 billion to HK$9.8 billion.
Home prices in Hong Kong rose the most among the world's major markets in the fourth quarter, property adviser Knight Frank LLP said in April.
Average prices climbed almost 28 per cent from a year earlier in Hong Kong, while in China they advanced 25 per cent, a global index compiled by the London-based broker showed. They rose 3.4 per cent in the UK and fell 3.1 per cent in the US, according to the April 21 survey.
Luxury home prices may rise 20 per cent this year as the economy expands and supply remains limited, real estate broker CB Richard Ellis Group Inc said in January.
By Bloomberg
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