Kowloon's Express Train Station (XRL)

[drbubb]

I think the Centaline figures are realistic - at least for West Kowloon

I will summarize them;

1 Year:

== == RISING

Centaline Mass Mkt Idx: +2.44%
Kowloon Station==== : + 4.82%
Olympic Station /TKT= : +1.26%

== == FALLING
Carib.Cst /Tung Chung : - 4.06%
Taikoo Shing /HKisland : - 8.89%
== ==

If Taikoo Shing is a decent bellwether for Hong Kong Island, it has underperformed. And the positive impact of the completion of the XRL may still be in the future, since it remains about 2 years away.

[drbubb]

WILL THEY CALL it the "Back Side" (HK Island) ?

 

( A )

OTP,
I really wish your predictions come true.. that is HK side property prices slide (or under perform) and Kowloon side increases.. that will enable me to invest on HK side by end of 2015 .. as I do not wish to live on Kowloon side as it does not make sense to me personally and do not need to use XRL..

Lets hope for another 10% correction per annum on HK side...

 

( B )

I never said that - "HK will go down, while Kowloon rises."

That is a misunderstanding of what I am saying.

My view is that the area within walking distance of the XRL station will outperform -

and maybe a little further than walking distance. But I don't see any reason why the rest of Kowloon will do better than HK side.

The Fans-of-HK-Island and Fans-of-Midlevel-Luxury-flats have been wrong for many months, and may continue to be wrong for another 2-3 years at least.

The center of gravity of the HK SAR is shifting towards West Kowloon (or maybe expanding towards West Kowloon.) And I think it would be wise to recognise that. Mid-levels is likely to remain attractive for many people, but may one day be seen as a grand but congested backwater.

If Kowloon is the "dark side", Hong Kong Island might be called the "backside" by forward-looking people living on the peninsula. (Haha.) Back-side for "backwater" and "backwards looking" people who live there.

As in:

"He had to leave (the party?) early to return to his faraway home on the Back-side." I expect people to say this at many glamorous functions at the West Kowloon Cultural Centre, after the key venues open in a few years time.

===

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

[drbubb]

MAN WAH and neighboring buildings - An interesting discussion from AX

 

Photo-No.1 :

 

( Poster A. ):

L-- Gr--- ,

I am planing to buy a Flat in 49 years old Building very near to Kowloon & Austin Station and within 2 years there will be new Rail link. i am waiting since last June might prices drop but Flat which i want to buy last year asking price 3.2million now its 3.8million. i want to do longterm investment probally 15 to 20 years as long as building did not demolish.

The current bank Mortgage interest rate is 2.15%, building is 49 years old but still bank offering 21 to 30 years payment term .

if unit cost 3.8million, 70% mortgage it wil be around HK10,000 monthly ,the Flat can be rented 14,000 per month, The goverment rate is around HK$4,000 per year, Managment Fee 500 montlhly.

after 2 years time when rail link open, i believe that JORDAN will be completely change, Rent will increase , and as there is many new investment in surrounding area such as THE AUSTIN just opposite, CORONATION back side,

if even interest rate increased i still be able to cover everything from the rent income. ( do u think its possible )

i am trying to seek advice whether its worth to buy or not as i have plan to stay here my rest of life. my only and Major concern if property drop as many predicting 25-30%, it will be great lost if i purchase now 3.8milion and after 2 years drop to 2.8million.

 

( Poster H.):

 

These old buildings are just next to THE AUSTIN and near to New Rail Link,as far as my experiance these buildings will be demolish sooner or later within 10 years as many new development such as THE AUSTIN, CORONATION and more new project will be in future, many developers keeping eye on these old bldgs to buy for future project ,because of location,west kowloon culture district.and will be center of hong kong in 2 years time.

at the moment rent is 13000 to 14000, bank payment will be 9000 to 10,000 depend on loan size, OTP know very well about these bldgs and future of these bldgs

 

( Poster O.):

 

Yes, the location is very good - and there will be excellent redevelopment potential. The Land is almost worth more "dead" than "alive" (except for One Thing.*

Photo-No.2 :

The cranes are building the station for the Express Train to China (XRL.). And on one of the other sides is the Coronation building, which sells at about $23,225 per sq. ft, Net, and $18,148 psf, Gross- versus maybe $7,500 psf, Gross for the ManWah buildings. Coronation has 32 floors, and Man Wah has 18 floors.

/More Photos of the area: http://tinyurl.com/GEI-XRL

*The ONE THING is...

THE DENSITY of the Man Wah buildings. (see photos above.) If they are torn down, they would likely be replaced by Taller buildings, but less densely packed. So there may be little or no net gain in saleable area from redeveloping the space there. There could even be a loss of saleable space, depending on how tall the new buildings are, and the design of the replacement buildings.

Having said that, I think you will make money, so long as rents remain above your interest payments (If this works, it will be because interest rates do not rise too fast.) Even so, I would avoid the 3 or 4 buildings made with slat water, which are said to have crumbly concrete, since that might add some unnecessary headaches.

===

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

[drbubb]

Commuting by XRL (PM's - of interest to other readers)

==========

A:

Have they announced approximate travel times for the XRL and frequencies?

Also any pricing information? Just trying to figure out what it might be like for work commutes.

B:

If the prices of Train tickets have been announced, I am not aware of it.
Maybe a bit cheaper than airplane tickets (?)
But with less hassle when traveling.
That would be my guess

 

A:

I'm just wondering if it is trying to be like the trains between Connecticut and Manhattan where people use them daily as work commutes.

But if it is priced to be more inline with airplanes then it'll be far too expensive for that.

B:

" ...like the trains between Connecticut and Manhattan "
Interesting concept.
It is possible.
Certainly, the trains will be meant to accomodate Business Trips within one day.
As for daily commuting for the middle class?
I am really not sure. Possibly.
Let's watch this.
I think some mainlanders will want to have their families living in HK, for the schools (and safety?), while doing business in China.

That is why I am (relatively) bullish on Kowloon Station, Olympic station, Yaumeitei, TST...

[drbubb]

Commuting to HK from Shenzhen, China

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

A:
I'm hoping that it is priced as to allow for daily work commutes. However the commute I had in mind is the opposite of what you suggested - I think it will be HKers living in Shenzhen commuting to work in HK. HK is too expensive for middle class HKers and they can afford to rent are too small to start a family but the houses in Shenzhen are both larger and much cheaper. In Shanghai I was renting at half my HK rent and my SH place was both larger and in a prime expat neighborhood (whereas my HK place is not).

 

Express Ferry now; Express Train later?

Taking Manhattan as an example again, the commute is not from Manhattan outwards but rather inwards. Manhattanites found Manhattan cost of living too expensive so they move out to Jersey or Connecticut where they can buy more for less, and then commute back to Manhattan everyday.

If this is the plan then the interesting property plays are not at the HK stations but rather the SZ stations where HKers will want to live next to such that they can get back to HK easily every morning for work.

-----------------

 

B: Tung Chung's outperformance

==

Sure. I get that.
I bought several flats in Caribbean Coast in Tung Chung based on a similar logic. (see old thread)

The idea back in 2007: (ICC was finished in 2010):
High paying jobs in ICC, once it was completed, might help push up property prices in TC. And it seems to have worked*.

 

Caribbean Coast caught up with Discovery Bay

 

Now, I would say you would have to find something better and cheaper in Shenzhen (than in TC) to make the make the price arb work, by living in Shenzhen. I am not aware of prices in China. But when I looked at property near the bridge (under construction) in Macau, they were no cheaper than in Tung Chung.

If you look, am sure you will be able to find something. (In fact, I know people who are already living in SZ and commuting to HK by express ferry.)

 

And I have heard that industrial properties in Shenzhen might be something to focus on. But I have not done any looking, partly because a Visa to China is so expensive, and I do not want to own property in China now.

No doubt, the Train will be a useful transport link, creating investment opportunities on both sides. And part of the dynamic will be price arbitrage related.

 

==== ====

*Caribbean Coast vs. Sorrento: Seems to have hovered at near a 3:1 Ratio

But that ratio dropped from 3.5 to 2.7 (by 23%) by the end of 2012.

I presume that CC price rise got a push from people seeking cheaper rents, who accepted the extra commuting time.

Since then, Sorrento seems to be benefiting from its proximity to the XRL, as people anticipate the completion of

the Express Train in less than 2 years.

 

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 :

[drbubb]

A big "positive" factor, is now delayed

"Off the rails" - Two Year Delay in XRL to 2017

Hong Kong Standard - ‎10 hours ago: Wed., April 16, 2014

The HK$67 billion Hong Kong section of the Express Rail Link to Guangzhou has been derailed by the weather and other difficulties.

The Mass Transit Railway Corp yesterday blamed the black rainstorm on March 30 and unforeseeable challenges for what it says will be a nine-month delay.

The MTRC, which is building the 26-kilometer Hong Kong section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link, said the start of train services will now likely be postponed to 2017.

==

> more: http://www.thestandard.com.hk/news_detail.asp?we_cat=11&art_id=144599&sid=42064851&con_type=3&d_str=20140416&fc=4

= =

Lawmakers blast MTR Corp officials over express rail line's delay

South China Morning Post - ‎8 hours ago‎

Hong Kong's transport minister and the MTR Corporation are facing calls to come clean about the reasons for a delay in completing the multibillion-dollar high-speed railway to the border, and about how much extra it might cost the taxpayer. Lawmakers ...

(The Minister said in May, that the XRL could/would? "still be completed on time" - ie before the end of 2015.)

=========

I reckon the Developers were better informed than the HK Lawmaking body was - hence their willingness to sell off Imperial Cullinan and The Austin in a hurry, from late last year. Now that a long delay has been announced the positive impact of the XRL may stay muted for a longer time

[drbubb]

Express Train Update - The XRL Station is rising now (at last)