Tuesday, July 30, 2013

Property agents in Hong Kong hit hard

引用: http://www.channelnewsasia.com

HONG KONG: Thousands took to the streets earlier in Hong Kong this month to protest against the government's recent Hong Kong Property tax hikes.

Made up mainly of Hong Kong Property gents and disgruntled home-buyers, they are angry at the government for doubling the stamp duty on Hong Kong Property transactions since February to around 5.5 per cent.

Protest organiser Raymond Ho argued the cooling measures are hitting the innocent.

Ho said: "Some middle-class have a dream to live in one apartment and one for rent. They can handle their retirement if they have one flat for living and one for rent, but those stamp duty policies just freeze the volume of Hong Kong Property market and at the same time, freeze the social mobility of Hong Kong people."

Latest official data shows in the month of June, transactions in the city have fallen by 12.5 per cent, with fewer than 3,500 transactions completed. Total value of sales is down 22 per cent.

Hong Kong Property agent, Angus Or, has witnessed an even more drastic drop in transactions in the new town of Tseung Kwan O, built on reclaimed land along the bay, northeast of Hong Kong island.

His commission income has dropped by 70 per cent since the new levies were introduced.

"Usually in this area, there are about 600-700 transactions per month for buying and selling in total. Nowadays, there are only around 70 transactions for buying and selling alone," said Or.

Mass market estates, like Tseung Kwan O are in demand, because of tight supply in the market. Many home owners are now pulling back from selling their units.

Three years ago, a 684-square-foot apartment in the area cost around US$774,000. Today, the owner is asking for just over US$1 million.

"There has been no drop in prices. Most of the owners in this area have paid off their mortgages. When they bought the flat, it is only around HK$2 million and after 10 years, they have paid off their mortgages. They don't have a hurry to sell," explained Or.

Buyers, in the meantime, are in no hurry to commit either.

They anticipate prices to fall further down the road. The government has committed to significantly increase housing supply in the next three to five years. By then, the US Federal Reserve would have raised its benchmark interest rates. This means mortgage rates in Hong Kong will follow suit as the Hong Kong dollar is pegged to the US dollar.

Meantime, the pickings continue to be slim for agents like Angus.

And if the situation persists, industry insiders predict that up to two-thirds of Hong Kong Property  gents in the territory could be out of work.


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Monday, July 22, 2013

CORRECTED-China shares slip on growth concerns, Hong Kong weaker too

引用: http://in.reuters.com/

HONG KONG, July 16 (Reuters) - China shares slid on Tuesday, weighing on Hong Kong as both markets traded narrowly, with financial and Hong Kong Property stocks dampened by an official news report saying quarterly or annual growth of below 7 percent was acceptable.

By midday, the CSI300 of the leading Shanghai and Shenzhen A-share listings was down 0.6 percent, while the Shanghai Composite Index shed 0.7 percent. Both stayed in the same 60-point range for a third session.

The Hang Seng Index was down 0.1 percent at 21,287.4, while the China Enterprises Index of the top Chinese listings in Hong Kong slipped 0.2 percent as turnover stayed anemic.

"If it's true that 7 percent is the new base economic growth case, then it would greatly diminish chances that Beijing will even move to support the economy and this is a negative for the market," said Cao Xuefeng, a Chengdu-based analyst with Huaxi Securities.

The official China Securities Journal reported on Tuesday in a front page editorial that quarterly or annual economic growth rates of below 7 percent would not affect China's long-term goal of structural adjustment.

This comes a day after data showed the world's second-largest economy grew 7.5 percent in the second quarter, a figure broadly in line with China's official annual growth target.

The mainland's press also reported that the economy was likely to dominate the State Council's regular Wednesday meeting. Traders said there was some speculation that China's cabinet could unveil some policy announcements after that.

China Minsheng Bank fell 1.3 percent in Shanghai and 0.3 percent in Hong Kong. The country's second-largest lender China Construction Bank (CCB) shed 0.7 percent in Hong Kong.

Chinese Hong Kong Property and construction-related sectors were hurt by more reports in the mainland press about the possibility of the eastern city of Hangzhou starting a Hong Kong Property tax trial, after Shanghai and Chongqing.

China Vanke, the country's largest Hong Kong Property developer by sales, tumbled 2.2 percent in Shenzhen. Poly Real Estate fell 2.6 percent in Shanghai, leading the Shanghai Hong Kong Property sub-index down 2.2 percent.

Vanke Properties Overseas, due to report interim earnings on Friday, fell 3 percent in Hong Kong.

China Pacific Insurance Co Ltd far outperformed sector rivals on the day, jumping 2 percent in Hong Kong after posting favorable monthly premium growth data. Ping An Insurance slipped 0.5 percent, while China Life Insurance edged up 0.13percent.

NetDragon dived 17.7 percent in Hong Kong after Baidu Inc, China's top search engine, said it plans to acquire app store 91 Wireless from NetDragon for $1.9 billion to strengthen its foothold in the country's highly competitive mobile computing sector. (Editing by Jacqueline Wong)

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Thursday, July 18, 2013

China shares weigh on Hong Kong Property

引用: http://uk.reuters.com

HONG KONG, July 18 (Reuters) - China shares underperformed Asia in mid-morning trade on Thursday, weighing on Hong Kong markets, with the financial and Hong Kong Property sectors hit by concerns over the availability of financing for real estate developers.

The pace of China's monthly home price increase slowed for a third straight month in June though the year-on-year gain was the strongest this year, underlining the challenges facing Beijing's near four-year-old campaign to tame housing inflation.

By 0313 GMT, the CSI300 of the leading Shanghai and Shenzhen A-share listings was down 0.9 percent, while the Shanghai Composite Index slid 0.6 percent. Both broke below chart support that held for a week, pointing to more losses in the near term.

The Hang Seng Index slipped 0.1 percent, with the China Enterprises Index of the top Chinese listings in Hong Kong also flat. Bourse turnover in Hong Kong stayed weak.

"It's not just Hong Kong Property  specific anymore," said Lee Wee Liat, BNP Paribas head of Asia Hong Kong Property  "Fears are growing that the liquidity shock a few weeks ago may be starting to trickle into the sector."

The official China Securities Journal reported on Thursday that financing requirements for listed Hong Kong Property evelopers will be gradually liberalised and loosened, subject to conditions. This follows a similar Xinhua news report on Wednesday.

BNP's Lee added that mainland media reports alleging inappropriate corporate behavior by state-owned conglomerates have raised concerns how that may potentially affect state-owned real estate developers.

Shares of China Vanke, the country's largest real estate developer by sales, declined 1.6 percent in Shenzhen. In Hong Kong, China Overseas Land and China Resources Land each fell nearly 2 percent.

Mid-sized lenders China Minsheng Bank and China Merchants Bank skidded 2.9 and 1.8 percent, respectively in Shanghai. Their Hong Kong-listed shares also suffered losses on the day.

Cement producers China Shanshui and BBMG Corp tanked after they warned of declining profits late on Wednesday, pointing to a likely divergence at their upcoming interim earnings reports due in August. Three other cement producers had issued positive profit alerts last week.

On Thursday, Shanshui slumped nearly 10 percent, nearing its June 25 low, which was also its lowest since April 2009. BBMG lost 1.9 percent, while sector giant Anhui Conch Cement slid 2.1 percent in Hong Kong.

But there were gains for China Resources Power, rising 2.3 percent after the company said on its website that it considers recent media reports alleging corruption in the company to be defamatory and that it had adversely affected the reputation of its leadership.

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Monday, July 15, 2013

Hong Kong Property agents hit as policies to cool property prices dent deal volume

引用:http://www.scmp.com/

Hong Kong real estate agents are united. On Sunday morning, agents from big and small firms will march to government headquarters at Tamar in Admiralty to protest against measures designed to cool the Hong Kong  property market which, they say, have affected their livelihoods.

The protest is supported by industry leaders Centaline Hong Kong  property gency and Midland Realty as well as associations representing smaller agencies. The industry is calling on the government to scrap the measures.

"The entire industry, both big and small agents, is suffering," said Centaline founder Shih Wing-ching.

Shih blames a decline in transaction volumes on measures introduced by Chief Executive Leung Chun-ying after he took office a year ago. The policies aim to curb soaring residential and non-residential Hong Kong  propertyprices.

Centaline Hong Kong  property gency said its agents recorded 11 secondary market transactions in the top 10 estates over the June 29-July 1 long weekend, down 31 per cent from the previous two-day weekend.

About 200 primary units have been sold in the seven new projects put on sale since the new Residential Properties (First-hand Sales) Ordinance came into effect just over two months ago.

"No one buys. No one rents. The market is dead," said Lai Chau-lin, in her early 60s, who works for a small Hong Kong  propertyagency, Pak Shing Real Estate.

"I earned HK$1,100 in commission in February. That was my entire salary for the month and the lowest monthly income I've earned in the past 10 years."

Lai brokered one or two deals a month from March to June, for leases on sub-divided and regular units, earning between HK$3,000 and HK$5,000 a month after sharing the commissions with her boss.

"When the market was good, we had no time to go out for lunch because clients kept calling to look for flats," she said. "Today, I do not dare to go out for lunch because I have no money."

Sales of second-hand homes rose 23.9 per cent month on month to 3,314 units in June, compared with 2,674 in May, according to Centaline. The figures reflect the market conditions in May because of a time lag of about four weeks between buying a Hong Kong  property and registering the sale. In April, there were 2,171 deals for second-hand homes.



'The number once hit as high as 9,000 in March last year," said Lai.

The implementation of the ordinance on April 29 affected the market.

New rules required greater transparency in Hong Kong  property sales procedures, with developers having to publish sales brochures seven days before the official sale period and price lists three days before the launch, to give potential buyers time to study the details of offerings.

Agents said developers needed time to get used to the new rules. They said they expected sales to continue to be slow in the coming months. Sales of offices, shops and industrial properties have also declined.

Total Hong Kong  property  transactions, including residences, offices, shops and car parks, fell 12.7 per cent month on month in June to 4,616, according to Land Registry figures. The year-on-year decline was 45 per cent.

There were 8,302 transactions in January, 9,643 in February and 6,841 in March.

The fall in sales follows Leung's pledge to make flats more affordable for Hong Kong residents.

Hong Kong's housing prices have surged 120 per cent from 2008 and 34 per cent from their peak in 1997, Financial Secretary John Tsang Chun-wah said on February 22, when he announced the latest round of Hong Kong  property cooling measures.

Hong Kong is one of the least affordable Hong Kong  property markets in the world, with an average home costing the equivalent of 12.6 times an average annual income, according to an International Monetary Fund report in January.

On February 22, Leung's administration made good on its pledge and Tsang announced the doubling of stamp duty on residential and non-residential transactions worth more than HK$2 million. The stamp duty did not apply to those buying homes for the first time.

In a package of measures announced the same month, the Hong Kong Monetary Authority, the city's de facto central bank, announced its sixth round of measures to rein in housing prices since 2009, requiring banks to test borrowers' ability to repay mortgages on the assumption that interest rates would rise by 3 percentage points, instead of 2 percentage points previously.

It also lowered the maximum allowable loan-to-value ratio for non-residential Hong Kong  property to 40 per cent from 50 per cent for locals. It also capped mortgages for car parks at 40 per cent of their value, down from 50 per cent, and reduced their repayment terms to 15 years from 20 years.

The steps were the first taken by the HKMA that dealt with non-residential loans. In October, a 15 per cent levy on non-local and corporate Hong Kong  property buyers, known as buyer's stamp duty, was introduced.

That same month, the government raised a special stamp duty on sellers, introduced in 2010 to curb speculation, by 5 percentage points, and extended its effect on resales from two to three years. The rates now range from 10 to 20 per cent.

Major domestic agencies and international Hong Kong  property consultants are diversifying their businesses.

Hong Kong  property consultant Savills, which until now had focused on brokering big-ticket Hong Kong  property transactions and introducing overseas properties to Hong Kong buyers, is now expanding its sales force as it moves to enter the mass housing market.

"Small players will be forced out of the market," said Raymond Lee, chief executive of Savills, Greater China. "There are 40,000 real estate agents. One third will be forced out of the market."

Not all industry players agree the measures should be axed.

"The cooling measures are not targeted at agents, but the red-hot Hong Kong  property market," said Ringo Lam Chun-chiu, valuation director at AG Wilkinson & Associates. "In the face of rising Hong Kong  property prices, it is good to see the government impose measures to cool the market."

Professor Chau Kwong-wing, from the department of real estate and construction at the University of Hong Kong, said the decline in transaction volumes had affected the market.

"Hong Kong  property agents are being hit hardest, followed by related industries such as solicitors, surveyors and those who refurbish flats," he said. "Some will be forced out."

Chau said the weakening of these sectors would not result in a slowdown in Hong Kong's economy.

"Instead, Hong Kong's economy will be hit by external factors such as the global economy and the mainland's economic growth."

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Friday, July 12, 2013

Hong Kong developers' tepid bids for site reveal gloomy outlook for prices

The lacklustre bidding for a Tseung Kwan O residential site on Tuesday shows that developers believe Hong Kong property prices will come under pressure over the next few years, analysts say.

Chinachem's winning tender of HK$3 billion translates into an accommodation value of HK$3,653 per square foot, the lowest in the area in more than three years.

About 4,000 flats in Tseung Kwan O are available for sale, Centaline Hong Kong propertyAgency said.

Ken Lee Yuk-cheung, a sales director at the firm, said about 100 flat owners cut their asking price by 1 to 2 per cent after the tender result was released and that around 20 cut their asking price by more than 2 per cent.





"But the news was not so daunting as to make a majority of flat owners cut their asking prices," he said.

Eric Yuen Chi-fung, the head of research at Guoco Capital, said the bidding reflected developers' expectations for Hong Kong property rices three to four years down the road. "They believe Hong Kong property rices have downward potential, and so that's why their offers were conservative," Yuen said.

"Chinachem is a private company and is under no pressure to publicly report its profit. Its offer was the highest of the developers. The others must hold a more negative outlook."

Yuen said he believed developers were pessimistic because interest rates may rise as the US Federal Reserve moves closer to reducing its stimulus programme.

"Development costs will increase if interest rates rise," he said. "As construction costs continue to rise and housing supply increases significantly, developers have turned conservative when acquiring land."

Yuen said he expected Hong Kong property rices to drop, adding that how far they fall depended on the performance of financial markets. "It seems the government hopes Hong Kong propertyprices will fall 20 per cent," he added.

Charles Chan Chiu-kwok, the managing director of consultancy Savills, said he expected prices to drop 10 per cent to 15 per cent in the second half.

"Hong Kong property prices face downward pressure, as Hong Kong property  ales have stayed at a low level," he said. "Flat owners will have to cut their asking prices to lure buyers, and prices of new homes will be affected by an increase in supply."

Lee Wee Liat, the head of Hong Kong property  esearch at BNP Paribas Securities, said mass residential prices would be flat or rise by as much as 5 per cent.

"Developers submitted conservative offers for the Tseung Kwan O site because there will be plenty of new supply in the area," Lee said. "Demand for mass residential remains strong, and rental yields are still higher than mortgage rates, but the outlook for high-end residential flats is not positive."

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