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Developers cash in on luxury

Solid demand for Marinella and rebound in stock market encourages property firms to raise prices and go for early releases in high-end market

Sandy Li

Oct 26, 2011

 

 

Buoyed by solid buyer demand for a luxury development in Aberdeen, and a rebound in the stock market, a number of developers hope to cash in on improved market sentiment by launching pricey projects.

Developer K Wah International has indicated it will raise prices for its luxury residential development, Marinella, in Sham Wan, Aberdeen, after selling 210 of the 255 flats released this month in the first phase of sales at an average price of HK$20,000 per square foot.

 

 

Encouraged by that response, Sun Hung Kai Properties (SEHK: 0016) announced it would release 50 flats for sale at The Wings, above the Tseung Kwan O MTR station, at an average price of HK$12,698 per square foot. A 2,560 sq ft flat with rooftop, private pool and two car parking spaces will be offered at HK$51.2 million, or HK$20,000 per square foot.

 

The prices at The Wings are pitched above those of deals completed at The Waterfront in Kowloon Station at an average price of HK$11,111 per square foot.

 

They are also priced higher than those of five Taikoo Shing flats sold last week, which fetched an average of HK$9,641 per square feet.

 

SHKP says the flats will be put on sale as early as tomorrow.

 

Sino Land will today release 58 homes at One Mayfair in Kowloon Tong - a traditional luxury address - at prices that will range between HK$15,686 and HK$20,808 per square foot, with flats priced between HK$21.2 million and HK$45 million.

 

Yesterday, the developer released an additional three homes - two with gardens and one with a roof garden and ranging in size from 1,607 square feet to 2,436 square feet - priced at between HK$27,600 and HK$29,380 per square foot. The 2,436 sq ft flat with 1,333 sq ft roof garden commands the highest price per square foot of the three, and costs HK$71.56 million.

 

Wing Tai Properties is stepping up marketing of its luxury development at 9 Warren Street in Tai Hang, agents said.

 

"To take advantage of the improved atmosphere, more developers will release their luxury developments in coming weeks. The strong sales outcome at Kowloon Tong and Tseung Kwan O will further boost the prospects of the luxury residential sector," said Sammy Po Siu-ming, a director at estate agency Midland Realty.

 

Also boosting the confidence of developers who are about to release their luxury projects is the performance of the Hong Kong stock market. After a sustained fall that took the benchmark Hang Seng Index to a low of 17,983 points last Thursday, the index had rebounded to 18,968.2 points by the close yesterday.

 

But market sentiment remained cautious, said Po, and the reaction to the release of the two latest luxury projects was not likely to be as positive as that for new mass-housing projects, which attracted hundreds of buyers on their launch day.

 

"There won't be a big volume of sales, as most of these flats cost more than HK$20 million," he said.

 

While there were many cash-rich buyers who did not need to raise mortgages, the limits on home loans could weigh on sales, said Po. The maximum loan-to-value ratio for mortgages on properties costing HK$10 million or more was lowered from 60 per cent to 50 per cent in June. Nonetheless, SHKP had pitched The Wings at prices close to those being paid at nearby Kowloon Station, indicating that it was confident about the attractions of its brand name and the quality of the project, Po said.

 

"It aims to reinvent The Wings as another Cullinan at Tseung Kwan O, but offering units at half of what it achieved at Kowloon Station."

 

The average launch price at The Wings is 47 per cent lower than the HK$24,300 per square foot for which properties in The Cullinan at Kowloon Station sell on average.

 

The Wings, comprising 1,028 flats, is part of an integrated development that includes two hotels - a Crowne Plaza and a Holiday Inn Express - grade A offices and a shopping mall.

 

Lee Wee Liat, regional head of property research at Samsung Securities, noted SHKP's strategy was to launch in "reverse order".

 

"They put out the most expensive units first and then gradually sell those units at lower prices. They think it will be much easier to sell the higher-end units as they are still bullish on the luxury sector while cautious on the mid- to mass market segment," he said.

 

Cheung Kong (Holdings) (SEHK: 0001) said it might release the remaining three-bedroom flats at La Splendeur in Tseung Kwan O over the weekend.

 

A K Wah spokesman said that about 30 per cent of the Marinella buyers were mainlanders.

 

Derek Lau, a sales director for Centaline Property Agency's southwestern district, said flats at Marinella were being offered at about 13 per cent less than the HK$23,000 per square foot the market had expected.

 

"Most buyers will hold for long-term investment or leasing to bet on a further increase in prices. Investors account for 50 per cent of buyers," he said.

 

Lau said sales in the secondary market in the district had dropped as much as 30 per cent, as market attention turned to the primary market whenever a new development was released for sale.

==== ====

 

 

SHOWFLATS:

The Wings / SHKP : http://www.gohome.com.hk/new-property/the-wings/ad-10382/en/

MayfairOne/ Sino : http://onemayfair.com.hk/#/en/gallery - 8202-5633

Marinella / ????? : http://www.gohome.com.hk/new-property/Marinella/ad-10366/en/

============

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Winners and losers as Hong Kong rents scale new heights

 

Oct 27, 2011 .. By George Chen

 

When you walk around Hong Kong’s Central commercial and business district these days, you may notice a number of stores are holding “removal sales”, which means they can no longer remain in the same location. The reason? In most cases, just blame soaring rents.

 

ShanghaiTang.jpg

 

Many analysts have forecast declines in residential and commercial property prices in Hong Kong for next year, although at a stable pace rather than a sharp drop. This may be true for some suburban areas where purchase options are more plentiful than those in downtown areas, but until that happens, prices are likely to keep rising, at least for the rest of the year.

 

A couple of years ago, mobile phone industry leader Nokia took a moderately sized space on Russell Road in Causeway Bay just opposite Times Square, one of the busiest shopping districts in Asia, for its flagship store in Hong Kong. Local media said the store used to be one of Nokia’s busiest in Asia, thanks to mainland Chinese travelers. But the good old days are going to end soon.

 

The Hong Kong Economic Times reported on October 27 that British luxury brand Burberry had signed a new lease with the owner of a site currently occupied by Nokia. Burberry is said to have agreed to pay HK $6.5 million (about US $836,600) per month for the two-floor 5,200 square foot space,versus the HK $1.8 million that Nokia is paying.

 

When the news came out, the reaction from the market was quite naturally, “Wow”. One reader on Sina Weibo, China’s most popular micro-blogging service, wondered: “How many coats and bags will Burberry need to sell to cover the monthly rent?” In Hong Kong, a coat or bag at Burberry usually sells for about HK $10,000-15,000. You can do your own calculations.

 

/more: http://blogs.reuters.com/george-chen/2011/10/27/winners-and-losers-as-hong-kong-rents-scale-new-heights/

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  • 2 weeks later...

In Hong Kong: New Tax = Lower Rents

 

Per today's SCMP:

(1)

Owners rush for tenants to avoid penalty

 

A stamp tax to curb flipping has caused rents to plunge 18 per cent in Tai Wai and Tuen Mun

 

Speculators who bought new flats before (after?) last November's introduction of stamp-duty penalties for quick resales face a tough decision.

 

With delivery of their flats now falling due, they must sell and be hit with extra stamp duty of up to 15 per cent, or find tenants so they can sell later and avoid the extra duty. The ensuing competition among such speculators to secure tenants has seen rents plunge byb as much as 18 per cent in Tai Wai and Tuen Mun, property agents say.

 

Overall rents have started to ease, and dipped 1.3 per cent last month from September, says Ricacorp.

 

 

(2)

Bears on Rise in Home market

 

"Up to October 30, prices were down 2.8% from the peak, but researchers at Morgan Stanley (MS) expect a sharper decline as mortgage rates rise. HK banks have raised effective mortgage rates three times - to 2.9 per cent from 0.8 per cent - in the last six months. The increases were driven by a rising loan-to-deposit ratio, which reached 86.6 per cent by September."

 

MS expects nominal mortgage rates to hit 5 per cent by the end of next year... Thus, we expect property prices to fall by more than 10 per cent."

=== ===

 

Plenty of Bearish sentiments, but limited falls so far. Let's see if those predictions of rising interest rates come true. The US is talking about continue near zero rates through 2012. So they must be wrong, or HK will follow a divurgent path, for the forecasts to be right

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  • 1 month later...

Week : CCLI : CMMI : RobinPl : Tregun : Dynast : Clovell / IslHarb : ParkA : Waterf : Sorrent : TArch : CaribC

01/29 : 94.47 : 91.91 : 13,981 : 17,377 : 21,471 : 16,613 // 8,770 : $9,663 : 11,145 : 13,031 : 20,031 : 4,730

fr.12/4 -3.44% -2.26%: -1.38%: -1.38%: -1.38%: -1.38% / -2.82%: -3.98% -10.32%: -1.64%: -0.44%: +0.77%:

01/22 : 94.75 : 92.17 : 13,994 : 17,392 : 21,490 : 16,627 // 8,762 : $9,654 : 11,152 : 13,039 : 20,043 : 4,871

01/15 : 94.31 : 91.66 : 13,986 : 17,383 : 21,478 : 16,618 // 8,762 : $9,655 : 11,146 : 13,032 : 20,032 : 4,667

01/08 : 94.16 : 91.25 : 14,014 : 17,417 : 21,520 : 16,651 // 8,780 : $9,674 : 12,250 : 13,060 : 20,075 : 4,630

01/01 : 95.47 : 92.41 : 14,080 : 17,499 : 21,622 : 16,729 // 9,135 : 10,399 : 12,435 : 13,257 : 20,378 : 4,631

12/25 : 96.68 : 93.89 : 14,091 : 17,513 : 21,639 : 16,743 // 9,100 : 10,147 : 12,431 : 13,252 : 20,371 : 4,610

12/18 : 96.81 : 94.03 : 14,104 : 17,529 : 21,659 : 16,758 // 9,109 : 10,157 : 12,436 : 13,258 : 20,379 : 4,620

12/11 : 97.10 : 94.37 : 14,128 : 17,560 : 21,697 : 16,787 // 8,950 : $9,980 : 12,379 : 13,196 : 20,285 : 4,619

12/04 : 98.13 : 94.30 : 14,189 : 17,635 : 21,790 : 16,859 // 9,016 : 10,054 : 12,435 : 13,257 : 20,131 : 4,834

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  • 1 month later...

Hong Kong Homes Face 25% Drop in Year of the Dragon: Mortgages

 

By Kelvin Wong - Jan 31, 2012

 

The Year of the Dragon, representing wealth and power in China, is shaping up to be the opposite for the world’s costliest housing market, Hong Kong.

 

Mortgages (HKMGLEND) that need to be insured by the government because of risk experienced the steepest plunge in six years in 2011, a sign the biggest home price decline since the global credit crisis is accelerating. Property prices that have slid 6 percent since June may fall as much as 25 percent by 2013, estimates Andrew Lawrence of Barclays Capital, who predicted the initial slide in April.

 

Asian real estate markets from Singapore to Beijing to Mumbai are stalling or have started declining as governments seek to curb the type of housing bubble that brought down the U.S. economy. In Hong Kong, rising borrowing costs, extra transaction taxes and higher down-payment requirements imposed by the government have fueled the slump.

 

“We’re in for a very challenging first half,” said Wong Leung-sing, associate director of research at Centaline Property Agency Ltd., the city’s biggest closely held realtor. “The drop in secondary mortgages means buyers are having trouble borrowing from the banks the full amounts they need. The ones that are taking the biggest hits right now are the middle- to lower- priced housing segment.”

 

Prices had surged 70 percent from 2009 to their 14-year high in June. Home deals in December fell for a sixth straight month to the lowest since November 2008, according to the Land Registry.

Hong Kong will continue measures to maintain stable home prices, Financial Secretary John Tsang said at his annual budget speech today.

 

36 Percent Drop

Loans covered by the Hong Kong Mortgage Corp.’s insurance program decreased 36 percent in 2011 from a year earlier to HK$26 billion ($3.4 billion), according to figures released Jan. 11. It was the biggest drop since 2006, said the body, which was set up in 1999 to provide government insurance for mortgages exceeding 70 percent of a property’s value -- also known as secondary mortgages -- in a bid to revive slumping home prices at that time.

 

The HKMC in June 2011 reduced the maximum value of property that can be covered by its insurance program to HK$6 million from HK$6.8 million, the second reduction since late 2010.

 

Hong Kong’s median home price of HK$3.15 million is a record 12.6 times the annual median household income of HK$249,000, according to a Jan. 23 report by Belleville, Illinois-based Demographia. Second-place Vancouver had a 10.6 multiple, followed by Sydney with 9.2.

 

/more: http://www.bloomberg.com/news/2012-01-31/hong-kong-homes-face-25-drop-as-loans-fall-in-year-of-dragon-mortgages.html

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(POSTING HERE)

 

Someone has recently emailed me, and asked how they can start posting here.

 

It is FREE and easy, just follow these instructions (as posted on the New Members thread):

 

New Members on GEI

===========

Here's what you do:

 

1. Send an email to me at: New@GlobalEdgeInvestors+dott Com (ie using ".com" ending, not "dott Com")

 

2. Explain in a sentence or two, why you would like to be a member

 

3. Give me the User name that you would like to use (in the email)

 

4. I will set you up, and give you a temporary password

 

5. Please post ON THIS THREAD, the reason you gave me for wanting to be a member (if it is to "sell shoes", or to "sell drugs", or similar, I will not let you in.) That should be your first posting on GEI as a new member.

 

If you fail to make a post on this thread within a day or two of joining, I may delete your membership.

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A JUMP in Viewings - per SCMP

 

"More clients have asked to make appointments to view flats and I believe some of them will buy in the next few days." - per Estate agent at Centaline's Taikoo Shing branch.

 

Midland Realty said that it had scheduled 1,385 viewings at 15 big housing estates this weekend, an 18.4 percent increase from a week ago.

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  • 2 weeks later...

... posted on the What's Wrong with Mid-Levels thread ...

 

(This part was posted on the "Bankers slashing" thread): by OffThePeak

 

LOL - did you see the SCMP's Business section today?

 

I am reading their paper, and they must be reading my posts here. Haha

 

Headline:

"Luxury Rents decline as Bankers feel the Pinch" - Whodanthunkit?

 

"Rents on homes leasing for HK$100,000 to HK$180,000 a month slid 18 percent from Jan to last Oct, as six figure housing allowances in the financial sector came to an end."

 

They ain't worth it, folks, and we all know that !

 

"Overall in the luxury rental market (over HK$40,000)... fell 7% in the period."

 

This was a "far cry" from the 20% rise that some had been predicting.

 

Some bankers had seen their housing allowances "slashed in half."

 

(Pause for a few tears)

 

"Bankers with leaner budgets were moving to more offbeat locations such as Discovery Bay and Sai Kung, where homes were spacious but more affordable."

 

"Offbeat"? That's offbeat?

LOL the journalist doesnt know what is genuinely off beat.

 

(this part is added here):

 

"Younger middle-mgmt employess, who used to find properties in Sheung Wan and Wan Chai affordable, are now eyeing properties near the Olympic and Kowloon stations."

 

Banks are hiring people from overseas on closer to local terms.

 

(The once always-bullish-on-luxury ) Anne-Marie Sage chips in, saying she "expects tyeh drop in luxury rents to continue."

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  • 2 weeks later...

Week : CCLI : CMMI : RobinPl: Tregun : Dynast: Clovell / IslHarb : ParkA : Waterf : Sorrent : TArch : C'ribC : TaikSh.

08/12: 106.85 104.85: 14,311 : 19,126 : 22,483 : 18,563 // 9,638 : 10,815 : 12,324 : 16,031 : 22,582 : 5,412 : 10,292

08/05: 105.78 103.33: 14,313 : 19,128 : 22,486 : 18,565 // 9,659 : 10,988 : 12,822 : 16,052 : 22,612 : 5,162 : 10,208

07/29: 106.54 103.71: 14,375 : 19,212 : 22,584 : 18,646 // 9,663 : 11,145 : 12,879 : 16,123 : 20,313 : 5,345 : 10,689

07/22: 104.93 101.99: 14,275 : 19,978 : 22,426 : 18,516 // 9,362 : 11,096 : 12,831 : 16,063 : 20,124 : 5,123 : 10,211

07/15: 104.25 101.41: 12,156 : 19,067 : 22,414 : 18,506 // 9,247 : 10,960 : 12,759 : 15,974 : 20,011 : 5,114 : 10,061

07/08: 105.01 102.33: 12,511 : 19,078 : 22,427 : 18,516 // 9,262 : 10,978 : 12,772 : 15,990 : 20,031 : 5,031 : 10,759

07/01: 105.46 103.13: 12,586 : 19,193 : 22,562 : 18,628 // 9,300 : 10,976 : 12,762 : 15,491 : 20,569 : 5,179 : 10,518

06/24: 104.60 102.33: 12,489 : 19,045 : 22,387 : 18,484 // 9,241 : 10,906 : 12,712 : 15,430 : 20,487 : 5,185 : 10,546

06/17: 104.14 102.01: 12,435 : 18,963 : 22,291 : 18,404 // 9,232 : 10,896 : 12,686 : 15,399 : 18,599 : 5,110 : 10,530

06/10: 103.82 101.35: 12,457 : 18,997 : 22,330 : 18,437 // 9,225 : 10,589 : 12,699 : 15,415 : 18,618 : 5,070 : 10,185

06/03: 104.01 101.85: 12,455 : 18,993 : 22,326 : 18,433 // 9,252 : 10,620 : 12,686 : 15,398 : 18,598 : 5,205 : 11,093

05/27: 104.00 101.72: 13,777 : 19,733 : 22,334 : 18,440 // 9,643 : 10,710 : 12,740 : 15,465 : 18,678 : 5,253 : 10,659

05/20: 103.94 101.89: 13,697 : 18,052 : 22,306 : 18,416: 10,004 : 10,404 : 12,716 : 15,435 : 18,642 : 5,137 : 10,877

05/13: 103.35 101.46: 13,698 : 17,972 : 22,206 : 18,334 // 9,798 : 10,367 : 12,401 : 15,314 : 17,941 : 5,083 : 10,186

05/06: 102.89 101.40: 13,588 : 17,828 : 22,028 : 18,187 // 9,967 : 10,532 : 12,295 : 14,219 : 17,491 : 5,013 : 10,719

04/29: 101.12: 98.90 : 13,579 : 17,815 : 22,012 : 17,031 // 9,841 : $9,904 : 11,634 : 14,648 : 17,423 : 5,054 : : 9,922

04/22: 102.17 100.05: 13.644 : 17.901 : 22,118 : 17,113 // 9,793 : 10,022 : 11,636 : 14,651 : 17,426 : 5,221 : 10,663

04/15: 102.50 100.71: 13,610 : 17,856 : 22,064 : 17,856 // 9,390 : 10,442 : 11,661 : 14,682 : 17,463 : 5,017 : 10,886

04/08: 101.79: 99.76 : 13,800 : 17,866 : 22,075 : 17,080 // 9,493 : 10,477 : 11,668 : 15,102 : 17,473 : 4,865 : 10,581

04/01: 101.17: 99.15 : 13,795 : 17,860 : 22,067 : 17,074 // 9,550 : 10,401 : 11,641 : 14,441 : 18,548 : 4,871 : 10.384

03/25: 100.06: 97.97 : 13,723 : 17,766 : 21,952 : 16,985 // 9,296 : 10,105 : 11,346 : 13,907 : 18,359 : 4,926 : 10,373

03/18 : 99.17 : 96.75 : 12,738 : 17,747 : 21,928 : 16,966 // 9,230 : 10,160 : 11,380 : 13,949 : 18,414 : 4,766 : : 9,850

03/11 : 98.41 : 95.72 : 12,691 : 17,682 : 21,848 : 16,904 // 9,165 : 10,089 : 11,358 : 15,071 : 19,152 : 4,736 : : 9,615

03/04 : 96.69 : 94.28 : 11,591 : 17,531 : 21,662 : 16,760 // 9,029 : $9,937 : 11,244 : 14,269 : 18,960 : 4,751 : : 9,728

02/26 : 95.15 : 93.14 : 11,515 : 17,416 : 21,520 : 16,650 // 8,449 : $9,638 : 11,145 : 13,031 : 21,504 : 4,808 : : 9,702

02/19 : 94.38 : 92.10 : 11,515 : 17,416 : 21,520 : 16,650 // 8,580 : $9,784 : 11,160 : 13,048 : 20,058 : 4,770 : : 9,499

02/12 : 95.01 : 92.68 : 13,132 : 17,364 : 21,455 : 16,600 // 8,659 : $9,874 : 11,210 : 13,107 : 20,148 : 4,768 : 10,038

02/05 : 95.04 : 92,63 : 13,988 : 17,384 : 21,481 : 16,620 // 8,576 : $9,779 : 11,185 : 13,078 : 20,103 : 4,790 : : 9,873

01/29 : 94.47 : 91.91 : 13,981 : 17,377 : 21,471 : 16,613 // 8,770 : $9,663 : 11,145 : 13,031 : 20,031 : 4,730 : : 9,884

01/22 : 94.75 : 92.17 : 13,994 : 17,392 : 21,490 : 16,627 // 8,762 : $9,654 : 11,152 : 13,039 : 20,043 : 4,871 : : 9,875

01/15 : 94.31 : 91.66 : 13,986 : 17,383 : 21,478 : 16,618 // 8,762 : $9,655 : 11,146 : 13,032 : 20,032 : 4,667 : : 9,864

01/08 : 94.16 : 91.25 : 14,014 : 17,417 : 21,520 : 16,651 // 8,780 : $9,674 : 12,250 : 13,060 : 20,075 : 4,630 : : 9,295

01/01 : 95.47 : 92.41 : 14,080 : 17,499 : 21,622 : 16,729 // 9,135 : 10,399 : 12,435 : 13,257 : 20,378 : 4,631 : : 9,160

12/25 : 96.68 : 93.89 : 14,091 : 17,513 : 21,639 : 16,743 // 9,100 : 10,147 : 12,431 : 13,252 : 20,371 : 4,610 : : 9,877

12/18 : 96.81 : 94.03 : 14,104 : 17,529 : 21,659 : 16,758 // 9,109 : 10,157 : 12,436 : 13,258 : 20,379 : 4,620 : : 9,882

12/11 : 97.10 : 94.37 : 14,128 : 17,560 : 21,697 : 16,787 // 8,950 : $9,980 : 12,379 : 13,196 : 20,285 : 4,619 : 10,357

12/04 : 98.13 : 94.30 : 14,189 : 17,635 : 21,790 : 16,859 // 9,016 : 10,054 : 12,435 : 13,257 : 20,131 : 4,834 : 10,379

 

Historical Data : http://202.72.14.52/p2/cci/SearchHistory.aspx

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OTP's comment from AXpat:

 

P., your comments I have just seen - I am in London now:

 

Seems a heck of a lot, but I can't afford to buy something I could live in, so was hoping to at least get on the train, and own something smaller and rent it out.

 

Prices are lower than nearby zenith and queens cube, but broker says those are more premium buildings.

 

Questions

1)How would you evaluate this deal (price ok?)

2) Is this good timing or wiser to wait a few months?

3) I read somewhere that new developments actually drop in price after the first year or two. Should I be focussing on secondary market then ? Since this for investment and not to live in.

========

 

You might be "getting on the train" just as it is about to "go off the bridge" and then you could find yourself underwater.

 

Buying a new property, and paying the usual 10-20% premium strikes me as a little bit of madness. It may be justified if you want to live there and have "fallen in love with the flat", but otherwise it is a poor investment.

 

Remember, it may be new when you buy, but it will be secondhand when you sell. Why people seem to forget this basic truth is a mystery to me.

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TEA HOUSE HOTELS in Tai Kok Tsui

 

4715373_5_b.jpg

8 Anchor Street, Tai Kok Tsui, Kowloon, HK

 

Location.

Bridal Tea House Hotel Tai Kok Tsui Anchor Street is located in Kowloon's Mong Kok neighborhood, close to Olympian City Shopping Mall, Ladies', and Temple Street Night Market. Nearby points of interest also include Nathan Road and Mong Kok Computer Centre. Hotel Features.

Bridal Tea House Hotel Tai Kok Tsui Anchor Street's restaurant serves breakfast, lunch, and dinner. A bar/lounge is open for drinks. Room service is available 24 hours a day. Wedding services and tour/ticket assistance are available. Additional property amenities include gift shops/newsstands and laundry facilities.

/see: http://www.hotel-rates.com/hong-kong/kowloon/bridal-tea-house-hotel-tai-kok-tsui-anchor-street.html

 

Exterior_F_1.jpg

 

Bridal Tea House Hotel is located in the Li Tak Street of Tai Kok Tsui, Kowloon

 

/see: http://www.realadventures.com/listings/1238631_Bridal-Tea-House-Tai-Kok-Tsui-Li-Tak-Street-Hotel

 

109336map_e.gif

== == ==

 

COMING BOUTIQUE HOTEL at OSS?

A Fullerton High-end Boutique Hotel is planned for the lower floors of One Si1verSea

 

ossfullert.jpg

It is the OSS building at left, in the photo above

 

ossfullert3.jpg

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  • 2 weeks later...

Mid-Levels - The once-favored location, is now a Sad Laggard

 

To match much of the rest of the SAR, Robinson Place should be near $16,000 psf

CHART:

robinplace.png

 

Instead, it is languishing at $12,738 psf vs. $7,700 low.

 

So much for "prestgious locations" in the Mid-Levels. Don't say you were not warned !

 

Other Randomly-selected locations ar at/near 2X the early 2009 low

 

Park Island, New Territories : $5,609 psf vs. $3,200 low.

parkisland.png

 

Coastal Skyline, Tung Chung : $5,831 psf vs. $3,000 low.

coastalsky.png

 

Metro Harbourview, Tai Kok Tsui : $7,129 psf vs. $3,700 low.

metrohview.png

 

Island Harbourview, Olympic : $9,230 psf vs. $4,800 low.

islandhview.png

 

The Lesson: Bet on the prosperity of Hong Kong people, not pampered expat bankers and lawyers.

 

 

/source:

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From AX: OffThePeak posted:

 

CAUTIOUS ATTITUDE

 

(Not much interest in this thread yet - Perhaps it will grow over time. But I shall continue recording comments, and excerpts from News article. I do think it will make an interesting historical record.)

 

I liked the Interviews in today's SCMP Property Section. I expect many here will have similar views to the interviewees.

EXCERPTS:

+ Jeff Pao, 34:

... I dont think he will make the market collapse, but I also think he won't take any measure to support property prices if they begin to fall... I think prices will begin to fall as soon as 2014 once interest rates start to rise, and new housing supply increase.

 

+ Palanka Lik, mid-30's:

I am a mainlander working in HK and recently bought a flat... I don't expect home prices to fall because there is limited supply... and I don't think the new CEO will do anything to cause drastic change... property is the backbone of HK's economy.

 

+ Matt Burden, 41:

My understanding is that the new CE proposes to increase land supply in the New Territories, where most expatriates wouldn't consider living... Lots of people, like me, who are renting would consider buying if prices fell 30% or so...

 

A property agent at Centaline (James Au Yeung) said: "Home seekers will return to the market within weeks once they see there has been no big change in home prices."

 

/see CYL thread: http://hongkong.asiaxpat.com/forums/hong-kong-property/threads/146074/cy-leungs-impact-on-hk-property/

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Q. on AX: "Anybody holding Sun Kai Properties this week?"

 

I sold all my SHKP shares within a few weeks after buying them near last year's lows. (Actually, I have now sold ALL my property developer shares.)

 

HK16 Sold off Friday, on very heavy volume on Friday: 96.50 : -14.60 / -13.14%

On very heavy volume, over 120 million shares.

 

Sun Hung Kai Properties / HK16 ... update

shkp.png

 

I think it has enough momentum to fall to the $80-90 range this week.

 

Ideal support levels to bounce off would be the 530wk.MA near $89, or the Low of 2011 at $85.45.

 

I will consider buying this week, as early as Monday

=======

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COMPARE:

Robinson Place : 14,189 to 13,795 : - 2.78%

to

Island Harb'vw. : $9,016 to $9,550 : + 5.92%

 

That's a relative gain on +8.7% for the West Kowloon property.

 

Will the new MTR line enhance the performance of Mid-Levels?

Maybe not. Only if it is close enough to actually reduce commuting times.

I do expect that nicer buildings in Sheung Wan or Kennedy Town may gain on those remote and hard to reach ML buildings that some expats still favor. And as those ML buildings get older and more rundown, and builders keep pushing up new towers, making it more crowded, then the "lustre" of a ML location may continue to fade.

UNQUOTE

 

/from: What's wrong with the Mid-Levels?:

http://hongkong.asiaxpat.com/forums/hong-kong-property/threads/135960/whats-wrong-with-the-mid-levels?/

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Outlying Island - Interest is rising

===============

 

Posted by OffThePeak on:

 

 

Historical Prices:

Lamma, Cheung Chau, Peng Chau Prices

======

Month : MaWan : DiscBay : SLant. : Ch'ngC : PengCh :

Apr11 : $5,338 : $5,006 : $3,712 : $2,441 : $1,882 psf

May11 : $5,405 : $5,348 : $2,650 : $2,589 : $2,280

Jun.11 : $5,583 : $5,199 : $2,480 : $2,294 : $2,444

July11 : $5,499 : $5,460 : $3,764 : $2,464 : $2,242

Aug11 : $5,457 : $5,385 : $3,655 : $2,329 : $2,537

Sep11 : $5,457 : $4,991 : $3,655 : $2,329 : $2,537

Oct11 : $5,665 : $5,781 : $2,713 : $2,329 : $2,138

Nov11 : $5,511 : $5,477 : $2,713 : $2,329 : $2,138

Dec11 : $5,329 : $5,240 : $5,607 : $2,329 : $4,013

Jan12 : $5,258 : $5,008 : $5,205 : $1,554 : $2,251

Feb12 : $5,356 : $5,356 : $4,899 : $4,257 : $2,377

Mar12: $6,827 : $5,600 : $5,212 : $4,257 : $2,014

======

/source: http://transactions.gohome.com.hk/records/Peng-Chau/en/

 

I wonder how futures prices will be effected by policies from the Leung administration. Will CYL decide he wants to "develop the islands"?

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  • 2 weeks later...

CHANGE from early Dec. 2011:

 

DATABANK

 

Week : CCLI : CMMI : RobinPl: Tregun : Dynast: Clovell / IslHarb : ParkA : Waterf : Sorrent : TArch : CaribC

04/22: 102.17 100.05: 13.644 : 17.901 : 22,118 : 17,113 // 9,793 : 10,022 : 11,636 : 14,651 : 17,426 : 5,221

12/04 : 98.13 : 94.30 : 14,189 : 17,635 : 21,790 : 16,859 // 9,016 : 10,054 : 12,435 : 13,257 : 20,131 : 4,834

=====

Change +4.1%: +6.1%: -3.8% : +1.5% : +1.5% : +1.5% // +8.6% : -0.3% : -6.4% : +10.5% : -13.4% : +8.0%

 

Historical Data : http://202.72.14.52/p2/cci/SearchHistory.aspx

 

OTHER LINKS

AXpat Forum :: http://hongkong.asiaxpat.com/forums/hong-kong-property/

Cental-Data :: http://hk.centadata.com/cci/cci_e.htm

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  • 2 weeks later...

Hong Kongers have too much wealth in property,

to easily become forced sellers, if the market dives.

 

DISTRICT------ : Ave. Flat Price : Mort. % : If 50% Drop

(HK Island)

Central & West : HK$7,326,900 : 27.30 % : 54.59%

Wan Chai------ : HK$9,371,600 : 29.88% : 59.76%

(Kowloon)

Yau Tsim Mong : HK$7,233,800 : 23.09% : 46.17%

Kowloon City-- : HK$5,325,600 : 37.55% : 75.11%

(New T.)

Tsuen Wan----- : HK$3,309,600 : 45.32% : 90.65%

Yuen Long----- : HK$2,537,500 : 41.38% : 82.76%

Islands---------- : HK$3,514,700 : 45.52% : 91.05%

 

(data from today's SCMP Property section)

 

"Also: more than 700,000 owener occupiers have no mortgages, versus fewer than 500,000 who have them"

 

If banks do not foreclose on many properties "all at once" (that seems unlikely),

then a sustained deep property fall will not be triggered.

 

The least vulnerable areas are: Yau Tsim Mong, and Central & Western.

Most vulnerable are: Tsuen Wan, and the Outlying Islands.

 

People simply haven't had enough time in their homes to build equity, and many FTBers go to those areas to find cheaper prices, so they can buy with smaller deposits.

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NEW PROPERTY "BARGAIN" AT LONG BEACH, Olympic Station ?

Maybe.

 

(from the AX website)

 

Sid_1:

======

"Yes, of course it's ALWAYS better to buy secondhand. Not nearly always, but always always."

No it isn't and there isn't the evidence to prove it either.

 

 

walkup3

======

Sid_1: "Yes, of course it's ALWAYS better to buy secondhand. Not nearly always, but always always."

No it isn't and there isn't the evidence to prove it either.

And a litany of anecdotes doesn't suffice either.

There is no doubt that new property developments can be a snakepit for the unwary investor, particularly in non-prime secondary areas, but there are also opportunities. In the past new property provided a lovely playpen for flippers and that has slid away, but to say that purchasing second-hand property provides a lesser risk than new property doesn't justify writing off all new property purchases. It just isn't so.

 

 

 

OffThePeak

======

No. Secondhand is not "always, always" better than new.

 

Back in 2006, We bought a NEW High floor 3BR flat of 1220 sf at Caribbean Coast in Tung Chung for just under HK$3.5mn. At the time, a similar secondhand flat would have cost maybe $3.7mn.

 

This was from Cheung Kong, who are known to "dump" their flats at Low prices at certain times, when they have an excessive number of flats to sel.

 

There may be an opportunity like that in Olympic station, if one of my local agents is to be believed.

 

The Long Beach has sold 3 of its 8 towers, back in 2007. They are going to put one of the Towers on the market in the next few days. Viewings will start in Saturday afternoon.

 

The agent called my partner, and said he expected prices to be $8,000 -10,000 psf. If that is true, it will be an incredible bargain. My informed opinion is that TLB is a much better property, with a better clubhouse than Park Summit which just sold out at around $9,000 -10,000 average price.

 

Watch this space...

 

/source: http://hongkong.asiaxpat.com/forums/hong-kong-property/threads/146307/dont-buy-a-new-property/

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  • 3 weeks later...

STARVED OF SUPPLY?

 

That's looking like the fate of the HK Property market,

contrary to the predictions from late last year

 

"New Supply is Tight", says top property agent.

 

According to today's SCMP, the new supply in previous years was:

 

Completions:

2010 : 8,526

2011 : 9,460

 

Predicted, Centaline

2012 : 10,577

2013 : 15,844

 

So far, 2012 looks like it might bring the launch of less than 10,000 flats.

That's far less than the 12,000 - 14,000 or more which were projected at the end of last year.

 

Why did this happen?

So developers saw a falling market, and so delayed the completion and launch of properties.

 

As one extreme example, Hang Lung has 5 Towers left at The Long Beach, and that included over 1,200 flats. They were expected to have sold all of them by now. Instead, they have "gone slowly", selling only about half of the flats in one Tower.

 

Perhaps they will go on waiting for higher prices, seeing how slowly the new supply comes into the market.

 

If CYL wants to bring new supply to Hong Kong, he may turn to the Mainland China property developers, who are seeing a big slowdown in their home market, and are itching to exploit new opportunities in HK. They may be aggressive bidders in Land auctions in HK, provided they have enough cash.

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  • 5 weeks later...

(from AsiaXpat / Here's an interesting idea):

 

Posted by hkxxxpat

 

LGMV has it right, I think. A PE of 10 on HK shares beats a PE of 20-30 on direct invest property (don't forget HK property tax, stamp duty, agent's fee, empty flat costs, calls from tenants at midnight, people tossing fridges/TV/lite ciggies out of top floors - do people still toss TVs?).

 

Better yet, LINK REIT has a PE of 7.4 and div yield of 4.1% (PE of 7.4 means 13.5 yield!). Then with all that spare few hundred hours you visit each shopping centre and car park they own and check on your investments. You are then really invested in HK property with a nice annual income of HK$164k, no tax return either. Just what I would do. But most people will not be deterred by the facts.

=== ===

 

Interesting, no doubt.

 

Here's a chart for Link : http://tinyurl.com/Link-823

 

For Henderson Land : http://tinyurl.com/HendLd-12

 

And here's a comparison : http://tinyurl.com/HendLd-v-Link

 

Hend-Land-vs-Link ... update

 

74784805.png

 

The question that needs to be asked is:

Why did Link outperform Henderson Land (HK12) to such a great extent?

 

The answer may be that Shopping boomed in HK, Link successfully upgraded its malls, more than HK12 was able to grow its property development business. But from here, one has to wonder if Link still has more upside? Or if, instead the property developers like HK 12 etc will be the better investment.

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BARRATT IS ON THE TOP of a channel - Downturn Coming ?

 

Barratt Dev'l / BDEV : Weekly chart : Monthly chart : Daily chart : http://tinyurl.com/BDEV-610d

aa2wu.gif

 

BDEV has given us excellent early warnings of TURNS in UK house prices.

 

From major double LOWS in 2008 (July at 22p, and XX at XXp), Barratt/BDEV had a long A-B-C rally into a Sept. 2009 high at 280p. At a key point in the rally, we noticed that BDEV's price suddenly shot up in late March 2009. So in early April 2009, we predicted a 12 months "Dead Cat bounce" in UK property prices (in an Apr.4th podcast that you can still listen to, while looking at the Charts I describe.) In hindsight we can see a major low was made in HaliWide prices at £153,477 in Feb. and £154,066 in March - but those March figures were not available until April.

 

The expected rally duly arrived as buyers responded to the BofE's near-Zero Interest Rate Policy.

 

Since we did not think that the downwards correction was over after just a 2-year drop: We watched BDEV for a sign that the house price rally would peter out. From Sept. 2009 and its 280p peak (184p, on a split-adjusted basis), BDEV began to fall. This drop in the share preceded a fall in actual house prices, as measured by various property indices. A key point in the decline, was when BDEV slid back below its 252 day/1 year moving average. That occurred in Feb 2010. We anticipated that the confirmed break of BDEV's 1yr-MA would signal a renewed drop in UK Houseprices.

 

Within a few weeks, in Spring 2010 a second downleg in UK property prices began. And it was clearly reflected in the HaliWide / H&Nindex (the average of the non-seassonally adjusted Halifax & Nationwide indicies), which peaked in April 2010 at £169,287. The new downwards drift in UK prices came despite continued ultra-low interest rates. But prices only fell by £7,946 (-4.7%) to £161,341 in seasonal low of Jan. 2011.

 

haliwd2012.png

 

BDEV slid lower for most of 2010, but the rate of decline slowed and the stock bottomed in late Nov.2010 at near 71p, which was well above the Nov 2009 low of 31p. Then, a year-end rally in BDEV stock began, taking BDEV back near 90p by the end of 2010. We watched to see if the bounce in stocks was going to be strong enough to push back above the 252d/1 year MA near 100p, thinking if that occurred, it should signal a reversal the downturn drift in UK property prices.

 

BDEV rose above 110p, pushing beyond the 252d MA, suggesting that Spring 2011 would bring "upwards bounce" UK-wide home prices. But the action was unconvincing, despite the upwards trend.

 

Early in 2011, I asked on GEI: "Will the UK house price rally last? I think not."

 

The Homebuilder rally faded after the Spring of 2011, and BDEV rolled over at 120p and slid into the summer, as global stock markets suffered a correction. BDEV made a low of 65P in Aug. 2011. And following that pattern with several months lag, the UK Haliwide index peaked at £166,723 in July, and drifted down to a low of £160,554 in Jan. 2012.

 

In Q4-2011, the stock market pessimism was overdone. Global stock markets rallied, and that helped to propel a nice jump in BDEV, all the way up to 150p+ in March 2012. That was a 34% higher high than in 2011. But so far, UK-wide Houseprices have lagged behind the levels seen in the prior year. Perhaps Barratt's share price is benefitting from its London focus, where house prices ARE hitting new highs. Even so, as I write this in July 2012, the stock remains in a clear long term downchannel, albeit it has risen to the top of that channel.

 

BDEV has surged again after a Spring dip, rising to over 140p but remains below its 153p high. A drop in BDEV back below key support at/near 110p on high volume (If we see that), would be a sign that Crash Cruise Speed (with falls averaging more than 0.5% per month), is likely to resume in the housing markets. I expect we will see that after the London Olympics, when I expect realism to return to UK property markets.

 

I still expect a serious slide in UK House prices into 2013 or later.

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  • 2 weeks later...

WHY is the Hang Seng index like a Gold stock?

 

Because it trades like one!

 

(I stumbled across this surprising correlation when I was trying to explain to a HK friend how cheap Gold stocks were. Of course, Gold stocks look particularly cheap when compared with Gold, and it really makes little sense to compare HSI with Gold)

 

In general, the HSI led the GDX.

 

GDX / Major Gold stocks index vs. Hang Seng Index (HSI) ... update

 

gdxvshsi.png

 

Does anyone have an explanstion for this surprising correlation ?

 

PERHAPS it is because both Gold and HK property have been good "Safe Havens for Wealth"

 

HUI / Unhedged Gold stocks vs. Hang Seng Index (HSI) ... update

 

huivshsi.png

 

+ Gold bottomed in 2001, a few months after HUI/Gold stocks bottomed

+ The Hang Seng Index bottomed in 2003, around the time that HK property prices bottomed

 

centaindex.png

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  • 3 weeks later...

Hi everybody,

 

As some of you might remember, I sold my property a little over a year ago, made a big chunk of cash, and then started renting.

 

As so many at the time, I was expecting the market to correct so decided to play the waiting game...

 

So far the waiting game hasn't paid off and after a small dip in prices, they have started rising again.

 

In short: I'm back to where I was a year ago.... and a little over year worth of rent lighter. Honestly, I have no regrets, as I rented cheap and consider it an insurance expense for averting risk.

 

Having said that, I don't want to be renting forever, so time to reevaluate the situation. I've listed some of my observations below. Please feel free to comment.

 

The good:

  • The HK property market seems pretty strong at the moment. Resilient against the troubles in the US and Europe and with a very healthy mortgage market (40%-50% mortgages seem to be the norm). Definitely no sign of a credit bubble here.
  • More and more people seem convinced that all the money printing going on in US and Euro is actually helping to inflate property prices in HK (safe haven for wealth?), so with a very high likelihood of more money printing in US and Euro in the coming few years, and low interest environment, things seem to look very good for HK property (?).
  • CY Leung seems to be doing everything he can to avoid any kind of correction in the property market. He'll likely keep the current mortgae requirements in place, add a bit of HOS to the mix, but I suspect he'll leave it at that.
  • The supply of new housing seems to be very tight, so demand is likely to continue to outpace supply.

 

The Bad:

  • I do quite a bit of business with mainland companies, and please believe me when I say that they are hurting. Their share prices have been eroded in the past year and their sales pipeline is looking meager. The kind of deals and discounts we're able to get from them is AMAZING... all pointing to the fact that these Chinese companies are pretty desperate for business at the moment. Of course, these very same companies and their government maintain their almost psychotic story of strong growth and crazy profit forecasts, but reality is that many of them are losing money.
  • Before,during and even after CNY this year, I could barely walk through Canton rd. in TST. It was so over crowded with mainland shoppers that I avoided going there like the plague. I've been there several times in the past few months, and things almost seem quiet. Sure, there's still shoppers, but I can now comfortably walk, sales people are willing to help non-mainland shoppers again and I can easily get a taxi.
  • All eyes are focused on the Euro crisis now, but things in the US are far from solved. The Euro governments are printing, lying and deceiving like crazy to try and prevent a breakup. In the US the same is going on to boost voter confidence for the presidential elections. I still believe that China *heavily* depends in exports to these economies for its own survival. I for one don't subscribe to the idea that China's internal demand is in a position to counter a severe drop in exports.

The Ugly:

  • While many believe that HK people have confidence in the property market and are starting to buy again, I have come to know them in a slightly different way. HK people are not as stone cold as their counter parts on the mainland think they are. HK people in the property market like to play the game of chicken. When the first person blinks (buyer/seller), the rest quickly follows. The problem is that there haven't been any major blinking events to drive the market sharply either way. This explains the still historically low transaction volumes (they have gone up recently, but are historically still very low) and relatively stable prices (between 12 months ago and today, prices I have been tracking have remaining more or less the same, but currently in a continuing upward trend).
  • So to me, the big question is, what could potentially be a major blinking event? I see two:

    •  
    • Upward: The US and Euro continue their path into a depression, but China's internal demand (by some miracle) is able to support the economy and related GDP growth. Honestly, I see this as unlikely.
    • Downward: As the US and Euro continue their path into a depression, China experiences a shock as internal demand is not strong enough to support the economy. When this happens (if it hasn't started already), at some point, mainland Chinese people need to repatriate their money in order to keep their business going / pay off their dept. I read somewhere that there are approximately 245K empty apartments in HK (mostly owned by Mainland people). If these were to suddenly come onto the market, you have the perfect blinking event: massive supply of apartments suddenly comes onto the market. Very likely at or below market prices. I fear that this could trigger a massive sell-off, taking the market down a good 30+ %.

 

So gentlemen, please load your guns and start shooting. Am I missing some critical angles or facts? Is my downward blinking event very unlikely to happen, or am I stating the obvious?

 

Just to make the story complete, I have enough cash to make a 40-50% down payment (depending on the price of course) and a stable job. Will buy if it makes sense, but don't want to buy at the top of the market.

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That's a good analysis, YellowTip.

 

I wonder how many will see it and comment?

 

I will give you two posts, in reaction to it: A quick one, and a Longer, more considered one.

 

My quick comment is:

========

Have you thought of downsizing?

That is, buying something, but maybe smaller and cheaper than you had before.

 

This way, if the market drops, you will have something to gain.

 

But if it keeps rising, you will not find youself left behind.

 

Cyclically, I think the market could have another 2-3 years, and maybe more.

And we haven't yet seen the "crazy blow-up phase" which normally marks a long cycle high.

That's why I suggest still owning something.

 

On the other hand, it is hard to see how HK will escape getting some sort of downturn,

if China and the global economy turn sour in 2013-14.

 

Where to buy, if you downsize, is a whole different discussion, and that is one I am

pondering myself right now.

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