Tag Archives: Real Estate

Bell tolls for HK property giants

Sun Hung Kai Properties has said it is not aware of any attempt by Beijing to influence Hong Kong’s leading property developers to donate land for development as part of the government’s attempts to address the city’s housing crisis. It has, moreover, started to build  flats as small as 80sqft, as prices continue to soar amid a supply crunch. Most of its peers are not much better, with Wheelock, Henderson, and New World ganging up (yes, that is an appropriate word in this context) to build flats starting at 120sqft.

It seems logical to look around the rest of the GBA and wonder if Hong Kong’s exceptionalism is likely to continue for much longer where its property market is concerned. As has been shown with the slow-motion bankruptcy of the country’s second-largest property developer, China Evergrande, the central government is clearly determined to kill two birds with one stone: rein in runaway property prices, which have long been the single biggest complaint of the masses; and reduce debt levels that have built up to unsustainable levels in the sector over the past decade. It has made its intention clear to Hong Kong’s CE, Carrie Lam, who appears to be preparing a major speech centered on tackling the city’s acute housing crisis, that she must do the same in Hong Kong. Lam, for her part, has politely acknowledged that the property barons have been “more willing to cooperate” recently.

As has been written here before, Hong Kong has a role model to follow in Shenzhen, which this year will bring 100,000 new units into the market. It has also gone so far as to cap land auction prices, and has started to guide prices downward for property agents in the secondary housing market, which has caused a shock.

It would still appear, however, that Hong Kong’s mighty developers cannot quite put two and two together. That they can still think Hong Kong is run according to rules that benefit them exclusively is a measure of how long it has gone on for: they obviously still feel a certain immunity to the change that is sweeping the rest of the country. It is either that, or they know something about factional-regional political resistance to the Common Prosperity drive that no one else does.

Either way, Lam’s Policy Address will clarify all, fairly soon. The smart money would be on her unveiling a large-scale plan to fill in the sea off southern Lantau, which will take a long time to produce livable housing. But it is starting to look more possible that Lam will also be able to double down and take back land more aggressively from the hoarders developers than they might currently be imagining. Could Hong Kong replicate Shenzhen’s feat, which took five years to bear fruit?

It will be interesting to see. All the signs are there that the next few weeks will be the last hurrah for a group of geriatric men (and their sprightly offspring) who have jammed the people of Hong Kong into cages, literally and figuratively, for decades.

Hong Kong home prices set for record

Hong Kong’s homes, already the world’s most expensive, are set to reach new record highs this year, according to financial giant JP Morgan. As quoted in SCMP, the city is expected to see its housing market continue to inflate this year, with prices likely to rise by another 10%-20%, JP Morgan’s head of Asian property research, Cusson Leung, says.

Quantitative easing – more money in the hands of investors, in other words – and short supply, combined with demand from local users, are driving the market’s climb, Leung says.

This is despite “real and painful” talk of Hongkongers leaving the city, as a Bloomberg opinion piece states, following the protests of 2019 and the implementation of new national security legislation. Leung questions whether people leaving Hong Kong are mostly home-owners, and if they are, how many would be selling their properties now.

On a more light-hearted note, the SCMP also carried a report comparing the cost of a luxury flat in Hong Kong and an ancient Italian castle, asking whether anyone would rather live like a duke or squeeze into a few thousand square feet of space.

More on prices and living like a duke.

Shenzhen to add 100,000 housing units

Shenzhen has released its housing plan for 2021, which shows a surge in addition of new units into the market this year: 60,000 commercial flats, 40,000 public (subsidized) flats, and 100,000 rental units (rooms).

Hong Kong, by contrast, plans to have around 7,000 new units on the market this year.

The plan for Shenzhen shows that 149.3 hectares of land for commercial housing will be released into the market this year, of which 58.3 hectares will be for new supply and 91 hectares will be reserved for urban renewal.

The plan envisages approving applications for commercial housing of ​​6 million square meters, or about 60,000 units. This would include flats approved for pre-sale.

Public housing will cover 214 hectares of land, including 74 hectares for new supply, 19 hectares for renewal and reserve land, 81 hectares for the demolition and reconstruction of old residential areas (shanty town reconstruction), and 40 hectares for other (including industrial reform insurance). This will see around 40,000 units come onto the market.

Rental housing will cover 37 hectares of land as the city plans to provide 100,000 rental housing units (rooms).

Read more on SZNews

GBA property in 2019: Zhuhai, Shenzhen lead surge

The Greater Bay Area’s property market was generally stable last year, with two exceptions: Shenzhen and Zhuhai, where transaction growth was hot. 

According to local media, which reported on an analysis of official data by Penguin Financial, an investment adviser, Shenzhen was the beneficiary of policymaking in Beijing. The city’s designation as a Pioneering Zone for Socialism with Chinese Characteristics boosted market sentiment, resulting in new residential floorspace of 4.5 million sqm, up nearly 25%, while 37,846 homes were sold, up nearly 27.4%.

Continue reading GBA property in 2019: Zhuhai, Shenzhen lead surge

Tale of two cities’ housing markets

The contrast between Hong Kong and Shenzhen could not be starker than in their respective plans for subsidized, or social, housing. While Shenzhen is targeting a surge over the coming two years, putting as many as 300,000 units on the market, Hong Kong has announced it will likely be able to build no more than 13,400 units in the current year, well down from its initial target of just 18,000 for the fiscal period ending in March.

Shenzhen plans to sell 600,000 new homes between now and 2022, of which rental units will be no less than 300,000, it was announced this week. This is part of the city’s bigger urban development plan, unveiled in August last year, which will see 1.7 million new houses built by 2035, with more than 1 million being subsidized.

Continue reading Tale of two cities’ housing markets

Shenzhen moves to dampen housing rebound

Shenzhen’s Housing and Construction Bureau has acted to dampen speculation in the city’s housing market, targeting WeChat users who had been allegedly trying to engage in “collective pricing” actions.

The bureau said that anyone who was found to have engaged in such speculation would see their secondary housing online signing procedures suspended.

Estates in the spotlight were named as Shenzhen Hengyubin City, Zhongliang Fenghuangli Garden, and a few others.

Continue reading Shenzhen moves to dampen housing rebound

Shenzhen eases property curbs

For a city that professes its priority is affordable housing, Shenzhen appears to be taking counterintuitive steps to bolster its property market by relaxing restrictions that were imposed only a year ago.

The most recent is a decision by the city government to lift a measure that had been intended to cool the market for commercial apartments – homes built within mixed-use developments primarily catering to office and shop tenants.

Continue reading Shenzhen eases property curbs

Foshan eases home-buying curbs

Foshan has eased its restrictive policies on home-buying. Since Friday last week, first-time home-buyers who work in Foshan and hold a bachelor degree or above, will no longer be required to submit a pile of local documents such as tax receipts, social security payment proof, etc, in order to register for buying an apartment in the city. 

In other words: anyone already employed in Foshan, with a university degree, is welcome to buy a home, anywhere in the city.

Other major cities in China are experimenting with the new policy, such as Chengdu, Shanghai, and Nanjing, but only in selected districts, not the entire city. Sanya, in Hainan, has also adopted the reform.

According to a local official quoted by media, there are “quite a few” residents who meet the new threshold, and it is expected to stimulate the market. 

Read more (in Chinese).