Hong Kong property outlook - and Data Base

[drbubb]

THE FREEZE is happening in all sectors - not just residential

 

Volume of Property Deals Plunges in Hong Kong

 

 

Transaction volumes for offices in Hong Kong dropped 67 percent during the second quarter compared to the previous quarter, according to new data from Savills. Luxury residential transactions on Hong Kong island were 48 percent lower than the first quarter, dropping to its lowest level since 1997 and lower than the third quarter of 2008 during the global financial crisis.

 

Owners in residential, office, retail, and industrial markets are refusing to drop prices, in most cases leaving only end users in the market, according to Savills.

 

"Government measures have succeeded in freezing price appreciation across most sectors, with speculators, funds and other investors all exiting the market," Savills reported.

 

In the office market, there were only 282 deals during the second quarter, compared to 862 transactions during the first quarter. But prices remained relatively stable as landlords "were in strong financial positions and were unfazed by the demand shrinkage," Savills reports. -

. . .

The industrial sector had the worst performance during the second quarter, with only 25 transactions over HK$30 million, down from 72 the previous quarter, according to the report.

 

Similar to findings by Savills, a recent report from Jones Lang LaSalle showed a large drop in direct commercial investment in Hong Kong, caused by various government measures.

 

===

 

See Data and Charts more at: http://www.worldprop...h.H3fOTlVC.dpuf

[drbubb]

At last, some enthusiasm in the HK Property market !

 

As I mentioned on the other thread, New World seems to have got "it design right, and its pricing right" at Park Signature in Yuen Long. The property has nearly sold out the first two batches quickly, and now they are raising prices. It has been a while since we saw that.

 

Perhaps this success is one reason that HK Developer share prices are trading higher today:

 

+ HK-17 / New World : $11.18 +$0.30 / +2.76%

+ HK-12 / Henderson : $47.05 +$1.55 / +3.41%

+ HK- 01 / Cheung Kong : 112.80 +$2.10 / +1.90%

+ HK-16 / SHK Properties : 101.80 +$1.20 / +1.19%

[drbubb]

HK's PRIMARY Market

 

Does this argument make sense?

 

Thomas Lam Ho-ma (Head of Research at Knight Frank) says:

 

He "does not foresee a 'price war in the primary sales market as developers are financially strong, particularly the bigger players with a portfolio of local and overseas projects.' ...

So far, developers face no significant pressure to dump their new flats at big discounts."

- LuxeHomes, from SCMP

 

Okay.

I see his point that they are cash rich, and have little debt.

 

But who is going to cut prices?

 

The secondary market? Not likely.

People who are deriving use (a place to live), or rental income from a flat are less likely to sell it, than those who are holding a completed new property that is sitting vacant.

 

I still think the primary market IS TAKING THE BRUNT of the current correction, as secondary prices remain rather stable.

[drbubb]

Sun Hung Kai Properties has "confused" the market with its Cullinan price cuts.

SHKP fell 2.6pc on Monday, to HK$ 102.40 ... 10d-chart : 1-year-chart



"Launched... at prices which are nearly 20 per cent cheaper."

"181 units with an average selling price of HK$29,098 per sf, saleable area."
(About 311 units remain unsold: sizes from 435sf to 3,174sf)

 

"Market wondered... Why is the compant rushing to csh out?"
(The loss of the partial views coming from the construction of The Austin was not mentioned.)

 

"To draw buyers, they are offering discounts of up to 14 per cent."
"Applying discounts to the listed price, the average price of the new batch amounts to HK$25,024...

(agents said) was 19 per cent below the average price of secondhand..."
"Discounts of 70 per cent ... of stamp duties for buyers ... (are expected)

to tap pent-up demand for high end units and appeal to mainland buyers."

[drbubb]

/ FROM an AX thread :

http://hongkong.asiaxpat.com/forums/hong-kong-property/threads/151878/hk-developers-game:-cut-prices?/

 

Developers LURE Buyers into paying more with tricks

SCMP article - by Sandy Li

"SHKP's offer to subsidize stamp duty for buyers of The Cullinan was a slick manoevre"

She goes on to chronicle the steps used by SHKP to materialise strong demand in a once-quiet market.

Stamp Duty subsidy "instantly made headlines... was widely reported that the incentives plus the discount effectively translated a 20 per cent to 40 per cent discount... Result: more than 2,000 buyers signed up for the first 60 units."

She goes on to report that actual listed prices rose to a premium, then the incentives and rebates were cut.

Does it sound at all familiar? Of course it does.

Sandy Li wrote a good story, reporting a neat bit of clever marketing by SHKP.

I sent her an email recently, and suggested she take a look at this thread. If that helped her to track the complex figures involved in SHKP's strategy - then: Great.

WE need plenty of eyes on this market, and good reporting - to understand how a once simple market now operates in a time of government-imposed manipulations.

Good on you, Sandy Li!

[Traineeinvestor]

 

/ FROM an AX thread :

http://hongkong.asiaxpat.com/forums/hong-kong-property/threads/151878/hk-developers-game:-cut-prices?/

 

Developers LURE Buyers into paying more with tricks

SCMP article - by Sandy Li

"SHKP's offer to subsidize stamp duty for buyers of The Cullinan was a slick manoevre"

She goes on to chronicle the steps used by SHKP to materialise strong demand in a once-quiet market.

Stamp Duty subsidy "instantly made headlines... was widely reported that the incentives plus the discount effectively translated a 20 per cent to 40 per cent discount... Result: more than 2,000 buyers signed up for the first 60 units."

She goes on to report that actual listed prices rose to a premium, then the incentives and rebates were cut.

Does it sound at all familiar? Of course it does.

Sandy Li wrote a good story, reporting a neat bit of clever marketing by SHKP.

I sent her an email recently, and suggested she take a look at this thread. If that helped her to track the complex figures involved in SHKP's strategy - then: Great.

WE need plenty of eyes on this market, and good reporting - to understand how a once simple market now operates in a time of government-imposed manipulations.

Good on you, Sandy Li!

 

Agree. It would be much easier for potential buyers if we could easily determine the actual effective transaction prices ... but, of course, that's the one thing that the developers and agents do not want us to figure out (no different from sellers of any other products).

 

Incidentally, similar tactics were being used back on 2002/2003 to sell properties - with "free" furniture packages, zero percent second mortgages and so on being offered in lieu of price discounts.

[drbubb]

HK's BEARS ARE NOT WINNING... so far

 

(1)

H.K. Home Prices Seen Plunging 30% in Biggest Downturn in 15 Years

Barclays Plc joined UBS AG and Bank of America Corp. in forecasting a Hong Kong property slump, predicting home prices will fall at least 30 percent by the end of 2015 as income growth stalls and supply increases.

A “downward spiral of home prices is likely” as developers and homeowners adjust expectations, analysts Paul Louie and Zita Qin wrote in a report today. They assigned a “negative” rating to the Hong Kong property sector and said office prices will drop 20 percent.

Barclays’ forecast exceeds the predictions of a series of brokerages that have downgraded Hong Kong property this month and implies the biggest plunge in prices since 1998. Hong Kong home prices more than doubled since the start of 2009 on record-low interest rates and lack of supply, prompting the government to impose extra taxes and tighten lending restrictions.

“The magnitude of the fall is underestimated,” the Barclays analysts wrote.

http://www.bloomberg.com/news/2013-10-28/hong-kong-home-prices-to-drop-30-by-2015-end-barclays-says.html

 

(2)

A 30% dip?

- We've seen it already - and people BOUGHT IT with enthusiasm.

We saw it in the primary market, where prices were 20-30% lower than secondhand, if you consider the value of discounts and tax rebates.

But these cheap prices were only offered on the first 40-100 flats. ANd they were BOUGHT with enthusiasm, as buyers responded to bargains, and then bought aggressively at a "hot" new launch.

With all the excitement in the new property market, secondhand sales fell, with:

+ 8 units selling last week,

+ 9 units the previous week, and

+ 19 the week before that.

SELLERS in the secondhand market are showing virtually ZERO interest in competing with the big initial discounts in the primary market.

Instead, they are watching, waiting, and SEEING prices come right back up, as the cheap "early bird stock" gets cleared, and buyers respond with enthusiasm.

So far, apparent "bargains" are proving to be genuine bargains, and are not establishing new lower price levels.

===

/per-AX: http://hongkong.asiaxpat.com/forums/hong-kong-property/threads/152088/the-state-of-the-hong-kong-property-market-(10)/

[drbubb]

"Rents are not increasing .. i renewed mine this year at the same rate.. looking to switch to a bigger place and rents are lower than 2012."

-GD--

OTP:

I disagree...

Rents are higher than one year ago, for many flats - but not all.

Average rents are shown in the SCMP on Wednesdays, and I believe this is still showing a rising trend.

(There is also a seasonal pattern to consider)

You can see two that I track here, which show a mixed picture :

See post#2:

http://www.greenenergyinvestors.com/index.php?showtopic=17597&page=1

Estate: $/psf == : Aug12 : Aug13 : chg. / / Sep12 : Sep13 : change

Victoria Towers : $ 30.4 : $ 30.9 : +1.64% / $ 28.4 : $ 30.7 : +8.10%

The Hermitage. : $ 35.1 : $ 34.3 : - 2.28% / $ 35.9 : $ 35.7 : - 0.55%

Average-------- : $ 32.8 : $ 32.6 : - 0.61% / $ 32.2 : $ 33.2 : +3.11%

The two buildings (in nearby TKT) where I own property are still showing a clear upwards trend (vs one year ago). It may be different in Mid-levels, given the pressure on the high housing allowances. But don't confuse Mid-Level rents with those for all of HK.

[Traineeinvestor]

FWIW:

 

1. I have recently renewed a lease for about a 2% reduction in rent from two years ago. It's probably a little below market, but still a better deal for me than having a vacancy and all the cost of getting a new tenant in. The tenant works for a bank.

 

2. I have another property which has been in a break period for several months now. The tenant has not made any attempt to negotiate the rent down. Based on my experience with this individual, if he thought he could get a lower rent, I am sure that he would.

 

Both are small flats in Mid-Levels.

 

Right now I am not seeing any pressure on rents in either direction - but this is a very small sample size.

[drbubb]

Office space in prime areas losing its shine - HK Standard

+ Grade-A office market in Central and Admiralty has turned lackluster
+ Co's are more cautious, and new (cheaper) areas have opened up
+ Landlords in Central are offering renewals at flat or 5% down
+ At 3,120 sf unit at No.9 Queens Road was rented at just HK$35 psf,
and that's an amazing 36 percent below recent deals in the immediate vicinity
+ This was the lowest level since 2010

"the plunge in rents is even faster than expected"
- In Aug/Sep Lippo centre was at $40 psf

Meantime:
East Kowloon and Tsuen Wan are offering huge space of 20-30,000 sf at rents which are 80 percent lower than traditional CBD's

In May, China Mobile bought for floors in SHKP's Kowloon Commercial Centre (KCC) for about $1 Billion for space totalling 104,000 sf - that makes:
$9,615 psf (for the best building in Kwai Hing - it looks something like IFC)

 

> http://hongkong.asiaxpat.com/forums/hong-kong-property/threads/150502/meet-hong-kongs-new-centrals/

[drbubb]

Tung Chung area - Showing impact of New Property pricing

 

Tung Chung seems to be one of the first areas to show some noticeable reduction in second-hand prices thanks to New property sales

 

http://img17.imageshack.us/img17/3492/wva3.png

 

Timing-- : -- Date -- : CCLIdx : CC-Gross : -CC-Net-- :

Latest is- : 11-17-13 : 120.13 : $5,795/sf : $7,770/sf :

Peak was : 03-10-13 : 122.98 : $6,441/sf : $8,636/sf :

Change-- : + 8mo.s- : -2.33% : - 10.03 % : - 10.03% :

========

Why the drop?

The Visionary has 1,410 flats to sell, and the initial launch was at $7,671/sf, Net after discount

 

Why pay the same price for second hand (7-12 year old properties) when you can get "New" cheaper?

 

The Visionary may also be closer than some CC properties to the new East Tung Chung MTR station

[drbubb]

NEW SALES PROCEDURES - (from an AX thread):

 

(1)

OTP,
Over the last few years, how were new property sales handled regarding payment? Was it down payment and then the remainder upon receiving keys? Or was it down payment and then payment during milestones as estate is built? Or down payment with full payment soon thereafter?

Also what is the deal with the check? If you cut a check, your lottery number is pulled but you choose to purchase nothing, I assume you lose that money? But if your number is never pulled then the amount is refunded? Is that all correct (and are we positive this is how it actually works?)

As I understand it, HK new property sales historically were sold at premiums of 10-20% over local secondhand market properties. Now there is a complete reversal where new property is 0-20% below secondhand market prices.

Feel free to correct me if any of the above is wrong (because I am genuinely unsure).

 

(2)

L-1:
+ The cheque with application - is not tied to a specific flat, it is NOT a downpayment, though it will be used as one, if you choose to go ahead and buy a specific flat.

+ Normally, you do not pay so much upfront as 100%. Maybe 30% within 60-90 days, and the rest on closing would be normal. And you can do that with The Visionary too, I believe. But you will not get the 10% discount. So 80-90-95% are going for the 10% discount, I have heard.

+ NO. You do not lose the money. Of course, you get your cheque back if you have a low number and do not choose a specific flat and sign an S&P contract.
(I have handed over a cheque in the past, and had it back, or used it, the system works fine. It is all about a test of seriousness, and the larger the cheque, the more meaningful the test.)

 

(3)

OTP,

So if I cut a check and my name is drawn but I don't actually want to buy anything, there is no loss on my side? If so then I fail to see what value this check system has at all. Cutting a check does involve a minor amount of hassle in that you actually need to fill out the check and hand it in... but if they aren't going to actually cash it then who really cares?

The lottery would be a lot more serious if everyone who's name was drawn lost their check if they opted to not actually purchase an apartment. As it stands now (as I understand it... correct me if I am wrong though), it is little more than simply people writing their name on a cost-less lottery ticket and seeing if they get picked.

Presumably there might even be free value in entering the lottery game because perhaps only 10% of the apartments are desirable, and if you are lucky enough to get picked for one you can instantly flip it to a person who actually wants to purchase it to live in.

To me it seems like the check # is just a gimmick to make it appear as if there are lots of people who actually want to purchase these apartments. First off you can submit multiple checks and secondly (and most importantly) there is no potential loss in participating.

 

(4)

That is right.
You must have some degree of seriousness to go to your bank, and pay for a bank-certified cheque - that's what the Builders normally require. The bank will block the funds, and charge you something, if you return it unused.

This procedure cuts down on the frivolous interest, since people must have that much money in their banks, and will suffer a small loss for the processing charges from the bank.

Obviously, the $300,000 cheque required at The Long Beach (an many other new projects such as The Avenue - I believe), is somewhat more meaningful than the $150,000 cheque required at The Visionary.

THe larger cheque also cuts down on the multiple applications by those who really only want one flat, since they must block a larger amount of money for a week or two.

FLIPPING?
Not really possible since there is a 15% tax on selling within 12 months. It reduces after that, but you must pay something for as long as three years

The government has done its best to kill all short term speculation. But first time buyers (who plan to hold for three years or more) are mostly unscathed.

JUST A GIMMICK?
Not at all. It provides an effective queueing and allocation system. But the "gaming" behaviour by the buyers does inflate numbers, and you must be aware of that - AND the fact that all flats offered for sale are not equally attractive. I think the Builders are relying on the agents (seeking their 3% commissions) and the time pressure the system puts on "successful" lottery "winners" to move the less attractive flats.

When I look at TLB, I can see some flats that are obviously under-priced, and others that are overpriced. But this will not be so obvious to buyers who are less familiar with the building. I am sure this is true with any building. And the buying off-plan system means that most buyers are somewhat "blind" on what they are buying.

For years, we have seen fat premiums being collected by Developers selling new flats off-plan. A more realistic world, with waits for keys (and so forth), might mean that New Flats are sold at a discount to the secondhand market.

I predicted that a year ago, and some scoffed at my idea. Seems like it is already a reality - at least on the early batches of these new properties.

THis means, as I said in the first post here:
"HK's Property Developers (are taking) the brunt of this correction, especially in the early stages of the present correction"

 

(5)

@ Lucane01 - OffThePeak's summary is consistent with my experience. Back in 2002 - 2003, developers were also offering discounts to buyers who settled in full immediately rather than waiting until completion to make the final payments. IIRC,when we purchased a property 2002 we were offered a small discount (around 5% I think) for settling up front but decided that having to (i) service the first mortgage and (ii) using up some of the four year interest free period on the second mortgage, even before we had moved into the property meant we were better off not taking the discount.

A 10% discount combined with the higher deposit ratios required today and no interest free second mortgage would probably have resulted in a different decision.

===

> AX: http://hongkong.asiaxpat.com/forums/hong-kong-property/threads/151878/hk-developers-game:-cut-prices?/

[drbubb]

What Next for SHKP ?

 

SHKP / HK:16 ... update

 

[drbubb]

(I pay attention to news like this... about Repurposing Industrial areas)

 

KWAI CHUNG BUILDING WILL BECOME A MALL (near KCC)

 

SHKP to take advantage of HK revitalization scheme to turn a 40-year-old industrial facility

into a 10-storey shopping outlet

 

+ Luen Tai Industrial Building (Kwai Chung Rd, Kwai Chung) will be converted

+ Adjacent to Kowloon Commerce Centre (KCC)

+ The Mall is expected to open in the middle of 2015

+ Govt's revitalisation plan was announced in 2009, for old industrial buildings

+ Owners can avoid paying land premiums

+ This is the first conversion into a mall :

.. a Ginza-style vertical mall (different themes, on each floor)

.. a curtain wall, and decent size: 100,000 sf

.. linked by walk-way to KCC and to Kwai Hing MTR

.. target market : shoppers of 25 to 49 years: Retail, F&B

.. leasing to start: this month

 

Previously, Millennium City in Kwun Tong was opened in 2005, and spurred a change in the area.

It took seven years to convert the area into a new commercial area.

MC : offers 330 mn sf, office + 900,000 sf, retail

 

Area is changing:

+ The Open University opened new campus: Li Ka Shing Institute (at KCC)

+ The university will help generate traffic at the new mall

+ Kwai Hing is a populous area, but lacks a mall

[drbubb]

NOTES: West Kowloon and NT, versus Mid-Levels and HK Island

 

(from AX)

(1)
Conte_Riccardo_Mancioni_di_Montalcini (23 hrs ago)
==========
Living off HK Island is not a compromise, it's an added bonus.

Every time I bring my small daughter to the playground I see new expat faces. Clearly there are more and more expats who realise that cleaner air, greener grass, and more space can be found off HK Island.

Does anybody have access to Bloomberg, and is able to plot the changes in price over the last 10 years between Kowloon Tong, HK Island, NT East and NT West? You will find that over the last 5 years (or even 10 years) HK Island has gone up slower than the other areas. HK Island is simply not a very attractive place to live. It's overcrowded, overpolluted, and all the other negative attributes you can come up with...


OffThePeak (21 hrs ago):
==========
In a way you can find it by comparing Centaline indicies, and running ratios

DATA
Week : -CCLI : RobinPl: Dynast: TaikSh .// ParkAv : Sorrent / C'ribC
Yr.End
2011--: 96.68 : 14,091 : 21,639 : : 9,877 /10,147 : 13,252 : 4,610 :
2012-: 115.78: 14,985 : 23,883 : 11,665 /11,161 : 16,316 : 6,053 :
2013-: 119.07: 14,407 : 23,181 : 10,936 /12,325 : 17,849 : 5,768 :
====
'11>
2012 : +19.8%:+6.34%:+10.4%:+18.1%/+9.99%:+23.1%:+31.3%
2013 : +23.2%:+2.24%:+7.13%:+10.7%/+21.5%:+34.7%:+25.1%
====
+ Sorrento, in Kowloon stage was the best performer: +34.7%
+ Robinson Place, in Mid-levels, HK isl. was the worst: +2.24%*
+ The cheap one, Taikoo Shing, was the best on HK Island: +10.7%
+ Caribbean Coast, in Tung Chung, imho: was pushed down,
by the launch of the Visionary, at lower prices than secondhand.

Example:
( I may run some Ratios later, when I have more time)

=======
* Look back to the thread from 1229 days ago (Aug. 2010),
"What's Wrong with Mid-Levels?":
http://hongkong.asiaxpat.com/forums/hong-kong-property/threads/135960/whats-wrong-with-the-mid-levels?/
+ Over-Development
+ Air Pollution
+ Narrow Sidewalks
+ Traffic Jams
The Conclusion of the article:
"An area once praised for its privileged position in society with quiet streets, green areas, and open spaces, will soon be just another overcrowded and congested Hong Kong district. There is, however, one thing you can do, according to the think tank Designing Hong Kong: invest your money somewhere else - in a neighborhood that promises to be greener, more open and valuable in 20 years time."

 

=========

> AX-thread: http://hongkong.asiaxpat.com/forums/hong-kong-property/threads/153278/the-state-of-the-hong-kong-property-market-(11)/

[drbubb]

IMPACT OF INFRASTRUCTURE Investments

I haven't looked at SQUAREFOOT magazine for a while. So yesterday, when I picked up the 1 Jan. 2014 Issue - No.187, I was surprised to find the information on the Property Index page, (pg.19)

They have a comparison between Four Different indicies, including the main "Mass Residential Index", and three indices which track different segments of the HK Property market. Two of the segments are related to infrastructure investments:
...

Index--------------------- : 07-12 : 10-12 : 01-13 : 04-13 : 07-13 : 10-13 / Change
Mass Residential----- : 184.5- : 202.5 : 212.8- : 277.3 : 284.7- : 283.5 / +53.7%
Luxury Index---------- : 222.2- : 221.4 : 248.2- : 330.1 : 314.6- : 332.7 / +49.7%
Ratio: LI-to-Mass----- : 1.204r : 1.093 : 1.167r : 1.190 : 1.105r : 1.173 / - 2.53%
Kowloon East--------- : 186.5- : 206.7 : 214.6- : 280.5 : 291.7- : 287.6 / +54.2%
Ratio: KE-to-Mass--- : 1.011r : 1.021 : 1.008r : 1.012 : 1.025r : 1.014 / +0.34%
Shatin-Central Link-- : 185.6- : 204.6 : 209.4- : 303.6 : 283.1- : 296.5 / +59.8%
Ratio: SC-to-Mass--- : 1.006r : 1.010 : 0.984r : 1.095 : 0.994r : 1.046r / +3.96%
=================

The Shatin-to-Central Link "play" has been the most profitable of the three sub-sectors,
but the "extra" gain is not much, something like 4% more.

What are these?
Luxury Index: Properties over 1,000sf in 10 HK locations, + Kowloon Tong, etc.

Kowloon East: Three districts highly affected by the "Energizing Kowloon East Program":
namely Kwun Tong, Wong Tai Sin, Kowloon City districts

Shatin-Central Link: Four districts benefitting from the MTR expansion:
namely Tai Wai, Diamond Hill, Homantin, and Hung Hom/ To Kwa Wan.

 

==

 

Index ----------------------- : 07-12 : 10-12 : 01-13 :: 04-13 : 07-13 : 10-13 : Loss/Gn
Mass Residential--------- : 184.5- : 202.5 : 212.8- : 277.3 : 284.7- : 283.5 : +53.66%
Centaline Index, mo end : 106.5- : 114.4 : 119.1- : 118.8 : 121.0- : 119.5 : +12.21%
Ratio: CCLI-to-Mass----- : 57.7% : 56.5%: 56.0% : 42.8%: 42.5% : 42.2%: -26.98%
Sorrento, Kowloon Cent. : 16123 : 15744 : 16685 : 15024: 15186 : 17029 : +5.62%
Ratio: Sorr.-to-Mass----- : 87.39r : 77.75 : 78.41r : 54.18 : 53.34 : 60.07r : -31.27%
Ratio: Sorr.-to-CCLI----- : 151.4r : 137.6 : 140.1r : 126.5 : 125.5 : 142.5r : -5.88%

=====

That crazy jump from 212.8 to 277.3 (+30.3%) in Q1-2013 makes no sense,
and it undermines the credibility of the Mass Residential Index.

[drbubb]

TAKING HITS - Some Estates are now below Jan 2013 prices
===========

The HK property market is now highly illiquid, so the prices reported in the Weekly Index may not be as representative as they once were. (For instance, a low floor, poor layout flat may be 20% or more cheaper per sf than a high floor. So if the flat sold does not reflect the average, it may not be representative. And if only 1 or 2 flats are sold in a month, they may distort the reporting.)

Even so...
Some sales are being reported at levels well below a year ago - and I thought this might be worth tracking.

If readers see low prices being reported, they may want to post them here - Or post reasons why the index price is not representative.

Here are Two Examples that I noticed from today's Centaline Report:

Sham Wan Tw, Abd. : -5.36% : $ 9,364 vs. $ 9,894 (Dec. 2012)

chart--:
update: http://hk.centadata.com/cci/estate_info_e.aspx?id=002450

The Zenith, Wanchai : -8.38% : $ 12,829 vs. $14,002 (Dec. 2012)
chart--:
update: http://hk.centadata.com/cci/estate_info_e.aspx?id=000650

 

Week/yr: CCLIdx : RobinPl: Zenith : TaikSh. : ShamW / IslHarb: ParkAv: Sorren./ C'ribC : R:S/C

01/12/14: 117.71 : 14,391 : 12,829 : 11,331 : 09,364 : / 10,222: 11,367: 17,440/ 5,698 : 3.061

12/29/13: 119.07 : 14,407 : 12,715 : 10,936 : 09,356 : / 10,783: 12,325: 17,849/ 5,768 : 3.094

12/30/12: 115.78 : 14,985 : 14,002 : 11,665 : 09,894 : / 10,432 : 11,161: 16,316/ 6,053 : 2.696

12/25/11: 096.68 : 14,091 : 11,798 : 09,877 : 08,510 : / 09,100 : 10,147: 13,257/ 4,610 : 2.878

01/23/11: 091.21 : 13,877 : 10,334 : 09,502 : 07,723 : / 08,237 : 08,897: 14,00E/ 3,998 : 3.501

(estimates follow):

12/27/10: 088.38 : 13,600 : 10,500 : 09,200 : 08,000 : / 08,600 : 09,100 : 14,200/ 4,100 : 3.463

12/27/09: 073.23 : 10,000 : 08,600 : 07,800 : 06,800 : / 06,700 : 07,300 : 11,200/ 3,300 : 3.394

12/28/08: 056.78 : 08,000 : 06,800 : 05,600 : 04,500 : / 05,000 : 05,600 : 07,700/ 2,650 : 2.906

12/30/07: 066.98 : 09,800 : 08,000 : 07,000 : 04,700 : / 06,200 : 07,000 : 11,000/ 2,800 : 3.929

12/01/07: 053.48 : 08,000 : --N/A-- : 05,300 : 04,500 : / 05,000 : 05,300 : 07,000/ 2,500 : 2.800

Week/yr: CCLIdx : RobinPl : Zenith : TaikSh. : ShamW. / IslHarb : ParkAv: Sorren./ C'ribC :

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

1/12>Last+1.67%:- 3.96% :-8.38%: -2.86% : - 5.36% :/-2.01%: +1.85% :+6.89% : -5.86% :

1/09>Last+107.3 :+79.9%:+88.7% :+ 102.3 : + 108.1 :/ +104.4: +114.5 : +126.5 : +115.0 :

Week/yr: CCLIdx : RobinPl : Zenith : TaikSh.: ShamW. / IslHarb : ParkAv: Sorren./ C'ribC :

 

Let's compare (above):

- these Estates with the General Index, and some other estates I am following

CCLI Index : 117.71 vs. 115.78 : +1.67%
=========

Want to Find More?:
Centaline Index : http://hk.centadata.com/cci/cci_e.htm
Historical Prices : http://202.72.14.52/p2/cci/SearchHistory.aspx

 

> http://hongkong.asiaxpat.com/forums/hong-kong-property/threads/153403/taking-hits-estates-below-2013/

[drbubb]

Despite all the Bearish sentiment, this looks Bullish on HK Property:

SUPPLY of New Flats hits a Four Year LOW

Completed flats now at 8,300 new private flats at end 2013.

That's 18 per cent below 2012, and well below the govt's expectation

of 13,551.

Analysts about 15,000 to be completed in 2014 (though I have noticed these estimates are chronically too high "best case" guesses.)

Will see a Squeeze after Chinese New Year?

It is possible, though very unexpected within the market.

(Of course, there are many Bearish things, like the emerging China credit crisis that could force the market lower. If the "solution" for that crisis is something that gets more mainlanders to buy in HK, we have the ingredients for an upwards spike in the HK property market.)

[drbubb]

Checking the Property shares for a size of a squeeze or downturn...

 

What Next for SHKP ?

 

SHKP / HK:16 ... update

 

 

SHKP looks like it could be headed for a drop, even a Big One, after the failure to sustain the effort

to get over the Trendline

[drbubb]

There are some very interesting cross-currents in the HK Property Market

 

 

Despite all the Bearish sentiment, this looks Bullish on HK Property:

SUPPLY of New Flats hits a Four Year LOW

Completed flats now at 8,300 new private flats at end 2013.

That's 18 per cent below 2012, and well below the govt's expectation

of 13,551.

Analysts about 15,000 to be completed in 2014 (though I have noticed these estimates are chronically too high "best case" guesses.)

Will see a Squeeze after Chinese New Year?

It is possible, though very unexpected within the market.

(Of course, there are many Bearish things, like the emerging China credit crisis that could force the market lower. If the "solution" for that crisis is something that gets more mainlanders to buy in HK, we have the ingredients for an upwards spike in the HK property market.)

 

 

> see HK Property thread : http://www.greenenergyinvestors.com/index.php?showtopic=13789&page=11

 

http://GEI-8.com/index.php?showtopic=13789&page=11

[drbubb]

RATIONAL Taxation is on: LAND & INFRASTRUCTURE

HK's got it (rational land tax). The USA lacks it.
The difference explains an important part of the difference in wealth creation between the US and HK.

Go and look up "Henry George" on wikipedia.

Or listen to this very good and clear podcast:

Show 164: Rick Rybeck on Value Capture

strong towns podcast: http://www.strongtowns.org/storage/podcasts/2014/012913_RickRybeck.mp3

Attorney and job creation, transportation efficiency and economic development expert Rick Rybeck joins Chuck Marohn to talk about taxes, fees and creating incentives for a better land use approach. You can find out more about Rick and his work at www.justeconomicsllc.com.

"value capture" means that people who own land, pay for the improvements in infrastructure around it

HK does this well (and has great infrastructure, and an efficient economy). The US does it poorly, and thanks to this and other wealth drains (military, finance, medical/pharmaceutical) is headed towards third world status. Don not think they do not deserve it, for the stupidity in not changing their cash drains.

[drbubb]

THE BATTLE IS ON - to Talk the HK Property market down

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

Estate Agents had a tough year in 2013. Many were only "saved" by the surge in new property sales at the end of the year, as developers offered big discounts on new properties in order to try to hit their 2013 revenue targets. Some actual "bargains" were had in the first batch of each new launch. Then the developers quietly raised their prices, by cutting discounts. And in some cases they got prices back up over the 2nd-hand market levels.

January was a slow month (perhaps because we had a very early Chinese New Year), and buyers wanted to wait for the CNY before stepping forward. Now the agents have decided to launch a campaign to talk the market lower.

"SQUEEZE on used-home owners as big firms battle" - The Standard's article heralded today

B-b-bullfeathers !

There's no squeeze on used home owners - they can stay in their flats and relax - the squeeze is on the AGENTS, let's be honest about that.

"Sellers have to slash prices by at least 10 percent, unless their flats are of exceptional good quality as homebuying is likely to be further dragged to the primary market this year..." said Midland Realty's CEO.

Let's look at his co's stock price...

Midland Hldgs. / Chart ... update : http://tinyurl.com/Midland-1200 : Last 12 mos

Do you think he might be feeling some pressure?

Now let me remove the spin in his words, and translate what he said into plain English:

"Sellers, we are having a hard time getting Buyers to pay prices within 5% of your asking prices. Many potential buyers are thinking they may get bargains in the primary market. Please make our job easier, and consider cutting your price by 10% or more, so we can tell the buyer he is getting a bargain. Else we will focus on the primary market too, where our percent commissions are higher, and it is easier to get buyers to jump, since they are dfazzled by the headline discounts."

That's the Truth, as I see it.

Now consider the dilemma of the Sellers. Unless they are leaving HK, or planning to rent, they will still need a place to live. If they cut their prices by 10% and make a sale, then they have to buy somewhere else. If they are lucky, they may get a genuine bargain in the first batch of a new launch. But they may have to join a lottery and get a low enough number. If they buy in the secondary market, then they will have to pay the large Double Stamp Duty. Or sell, and rent. How attractive is that? Why not just stay put, and do a few home improvements?

The agents may succeed in talking the market lower. Goodness knows, they are all trying the exact same Bearish tactic now, and the Press seems to be willing to help.

The Standard : http://thestandard.com.hk/news_detail.asp?we_cat=16&art_id=142189&sid=41498680&con_type=1&d_str=20140206&fc=7

But maybe we will find that the owners will sit tight, as they did in 2013.

Unless the developers cut more than they did last year, or 2nd-hand owners cave in, the market may stay reasonably stable, but with little liquidity. And we cannot completely rule some firmness.

Watch those areas, like Kowloon Station, where there is an infrastructure improvement (the XRL), and the supply of new properties has mostly been cleaned out in the wave of selling in Q4-2013. If there is a surprise towards the upside, that is where we may see it first. I still give this outcome some small chance of happening.

But I expect most people will back the Agents in their battle to break the confidence and steadfastness of the so-called "used home sellers." So maybe we will finally get the softer market that so many have been predicting for over a year. The odds of a drop in 2014, are now much higher than they were in 2013 imho.

[drbubb]

HOW MANY NEW HOMES was that ?

I called B-b-bullfeathers on the Notion that there is a Squeeze on Used Home Owners.

It is not on them, it is on the Estate Agents... who are now trying to talk the market down

> http://hongkong.asiaxpat.com/forums/hong-kong-property/threads/153181/hong-kong-property-market-2014-forecasts/

The article in The Standard says:

"Around 18,000 new flats - 45 percent than in 2013 - will be available for sale with aggressive discounts offered by developers." - Karen Chiu, in The Standard Property column today

NOPE. Not necessarily. They nearly always MISS TO THE DOWNSIDE on these projections.

I find it easy to believe that the actual figure will come in under 15,000 or even under 14,000.

And we started 2014, with one of the LOWEST numbers of new flats available for sale in years.

New Home Expected for Sale in 2014:

Developer------ : Proj.s : #Flats : Major Projects--------------------

Cheung Kong-- : # 5 ... : 5,235 : Mont Vert (1,350), City Point (1,717) LOHAS P-3 (1,648)

SHK Properties : 7 - 10 : 4,277 : Riva (668), Yoho T-3 (2,508), Mont One (144)

Henderson Ld.. : # 8 ... : 2,766 : Double C-3 (1,092)

Sino Land------- : # 5 ... : 2,180 : Pak Shek Lots (1,091), Kau To Area (973)

New World ------ : # 3 ... : 2,239 : The Austin (691), Double C-3, Pavilia Hill (358)

Kerry Properties : # 4 ... : 1,238 : Kau To Area, Ede Road proj. (43)

Wheelock & Co. : # 3 ... : 1,357 : The Austin, Tseun Kwan O Site (591)

China Overseas : # 4 ... : 0,470 : The Nova (255), Pak Tai St (168), The Green (40)

Swire Properties : 3 - 4 . : 0,444 : Mount Parker Resid. (92)

Chinachem Grp. : # 5 ... : 0,431 : Golden Gate (127), Jade Cove (86) BillionaireLuxe (37)

============= : ===========

10 Developers-- : 47-51: 20,637 - there may be some double counting

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

Previously Launched : http://eng.28hse.com/utf8/developerfront.html

[drbubb]

HK's Unholy Trinity : In Conspiracy?

GREASING THE SKIDS...

An "unholy*" trinity is working together

+ The banks with lower valuations (without transactions to back up those lower levels)

+ Property agents with advice to second sellers to "try lower"

+ The media with purposefully exaggerated reports of price cuts

Objective: to cut Hong Kong property prices (in the secondary market).

And they may succeed, as they did in late 2008.

Now there is a new factor - FORECLOSURES :

===

+ Mostly on very expensive flats bought by now "stressed" mainland buyers

+ Banks who wind up with these flats are not patient sellers, they tend to dump them as soon as they can, because the loss is taken by the distressed seller, not the banks

+ A drop in Rmb in recent days, may allow the sellers to accept lower HKD prices than one month ago

+ Buyers have been brainwashed into "expecting" lower prices - thanks to the work of the Unholy Three - and so are likely to bid in foreclosures at levels well below market prices

=====

*If you are keen to see lower prices, then maybe you think this is a "holy" trinity. Personally, I would prefer less biased reporting - so they are "unholy" to me

[drbubb]

HK Island Rent slide - an anomaly

Check out the charts on pg.2 of today's Property section (P2, in the SCMP)

First, you will see RENTS for Homes at about $24.3 psf

going sideways.

That's: "average rents of 100 housing estates" (HK$ per sft, gross)

To the right:

Average Rents in selected districts.

Here, includes:

+ Central Midlevels, now maybe: $38.5 psf

+ Island South, maybe: $38.5 psf

+ Happy Vallley, maybe: $36.1 psf

All three peaked sometime last year, maybe 5-6% higher.

The High-end, and HK island, are where property woes are concentrated so far.

That's what I see here