Hongkong Property Market Controlled By Epidemic Situation

With the epidemic gradually controlled, the Hongkong property market is heating up again.

In May, Hongkong's first hand housing turnover exceeded 2100, which was 1.6 times higher than that in April and reached a 1 year high. By contrast, in the first 4 months of this year, Hongkong's new sales volume was only 3209 units, down 58% from the same period last year, a record low of 4 years. Among them, in February of this year, under the haze of the epidemic situation, the Hongkong property market was almost unattended, and the turnover volume dropped to 340 in the past four years.

With the gradual relaxation of the social restriction measures by the SAR government, developers have begun to accelerate the pace of pushing the market, and the long overloaded purchasing power is ready to go. Due to the imbalance of supply and demand in the long run, property prices in Hongkong have been rising and falling, even in the downward cycle of the economy. Last year, although Hongkong's economy has entered a recession, the overall residential turnover has dropped by 3%, but overall property prices have risen by nearly 5%.

Ye Maolin, chairman of Hongkong Yicai securities, said frankly that the Hongkong housing market has seen a decline in the short term, but believes that it will soon become stable. "The weaker mentality of the owners is willing to reduce the price. In recent months, the property prices have fallen by about 1. If the owners are to turn around the money, or they may have a jump building, they want to hold the goods (pick them up) and take the next two to three months."

Ye Maolin has bought the Hongkong property since 2003. He once held all kinds of property assets amounting to HK $3 billion and was regarded as one of the senior investors in the Hongkong real estate sector. In the long run, he believes that property prices are hard to fall. Because of limited supply, "land supply is always scarce, and rigid demand is still large." Under the epidemic situation, developers have been closed down in recent months, and this year's supply is definitely insufficient, which helps stabilize property prices. He told reporters in an interview with the economic news reporters in twenty-first Century.

At the same time, the 2020 global life report released by CB Richard Ellis showed that in 2019, the ten largest cities in the world with the highest residential property prices, Hongkong continued to win the first place, with a residential average price of about 1 million 250 thousand US dollars (about HK $9 million 780 thousand), representing a slight increase of 1.6% over the previous year, which is about 25% higher than that in second Munich, Germany.

According to the latest figures released by the Hongkong rating and Valuation Department at the end of May, the private housing price index of Hongkong reported 376 points in April this year, representing a decrease of about 0.13% compared with March. In the first 4 months of this year, the index dropped by only about 0.84%. Compared with last year's May high of 396.9 points, the current price index fell by 5.27%.

"Day disc" reproduction

All the major developers in Hongkong have been pursuing a high turnover push strategy with "goods turning around". Leading developers have strong financial strength and can adjust the speed of pushing plates according to market conditions. Therefore, the recent push up of push plates has also been seen as a strong wind to Hongkong property market.

The mainland property leader Vanke launched a new disk in Kowloon City, Hongkong in May 21st. The price is more than 20% of the second-hand housing price in the same district. The first two days of the opening date recorded a subscription of about 1500, and the first batch of 94 partners was over subscribed for over 14 times.

The new "The Campton" launched by Vanke is located in the Changsha Bay of Sham Shui Po, Kowloon Peninsula, Hongkong. It is about 5 minutes' walk from the subway station. The first batch of 94 units was launched, mainly with small and medium-sized units, with a practical area of 287 square feet to 539 square feet. After deducting the discount from developers, the average price was 14 thousand and 300 Hong Kong dollars to 18 thousand and 500 Hong Kong dollars / square feet. The opening price of the lowest price unit is only HK $4 million 840 thousand.

Dozens of buyers queued up in the rain at the opening site. On the first day, the sales department visited 2500 people. According to the twenty-first Century economic report, the first 94 units were sold out in 8 hours, which means Vanke cash HK $880 million.

Hongkong's largest property developer, Sun Hung Kai's Wetland Seasons Park project, recently launched the first 298 suites, which sold 97% in a day and nearly HK $2 billion in cash. Eventually, the project received 10261 orders and 50 times more subscriptions.

Henderson real estate joint chairman Li Ka Shing in June 8th after the shareholders' meeting said that the property market in May is booming, first, second-hand transactions reached 5000 to 6000, reflecting the large market demand, the property market is expected to stabilize and healthy development.

At the same time, Huang Liangsheng, senior joint director of Zhongyuan Real Estate Research Department, told the twenty-first Century economic news reporter that as of April this year, the total number of goods sold by the top six developers in Hongkong (end of the project) was 4414, with a 8 month low. In April, the six largest developers decreased by 306, including 134 of Sun Hung Kai.

He pointed out that after the May 1 holiday, the housing market atmosphere gradually became active, and the volume of pushing up of major developers in May increased significantly. As developers take the strategy of selling units in batches, it is expected that more large new ones will be launched in the future.

"According to the recent situation of the first hand property market, it is estimated that developers will continue to push the market, and the sales strategy will mainly focus on the" cargo tail "and the small and medium-sized new plates below 10 million Hong Kong dollars. I believe that the property market will not fall sharply this year, the annual reduction is about 5%-10%. Laifang executive director Lin Hao Wen told the twenty-first Century economic news reporter.

In June, developers' willingness to push the market is still rising. Li Jiacheng's long real estate will launch the first brand new market this year, providing 1422 units of Tseung Kwan O sunrise 8 phase SEA TO SKY. The pre-sale period of this project is about 20 months. It is the largest new project of Chang Shi Group in the past 3 years.

In addition, with the improvement of the first hand property market, major developers have gradually returned to the land auction market. In May 23rd, the Lands Department of Hongkong announced that 19 residential tenders, including Chang Shi, Xin Di, Xin world, Xinzhi, Jiahua international, Dachang group, Jiali, China overseas, Jia Zhaoye, its international and Jiaming group, were competing fiercely.

Continuous influx of hot money

However, because of the sharp decline in Hongkong's economy and the rising unemployment rate, it is still uncertain whether the property market will continue to be hot.

Dead Leung Ban, vice president of Greater China and director of strategic development consultant of Greater China, said: "during the outbreak of the first quarter of this year, the Hongkong property market was under pressure. But as the epidemic began to ease in the second quarter, the backlog of demand was released and concentrated on the first hand project, pushing volume to a 12 month high. However, this transaction is soaring or only in the short term. As the unemployment rate in Hongkong is still rising, the impact of the economic downturn on the property market will not be fully revealed until the second half of the year, when the property market will move or change again. "

With the outbreak of Hongkong's local economy, the tide of unemployment has hit. Hongkong's unemployment rate rose 7 months to a more than 10 year high. Data released by the Hongkong Special Administrative Region Government Statistics Department in May 19th showed that the seasonally adjusted unemployment rate in Hongkong increased from 4.2% between January and March to 5.2% in February to April, over 10 years. The underemployment rate increased from 2.1% to 3.1%, a 15 year high.

Tao Ruhong pointed out that at present, the market is full of money, stimulating asset prices to rise and supporting property prices, so the decline in property prices in the first half is less than market expectations. "Some of the popular second-hand property prices fell by only 0.5% in the first half of this year. However, the market outlook is still unclear, the unemployment rate continues to rise, Hongkong's economic growth is expected to be negative, and global instability will bring downward pressure on the property market. Depending on the epidemic and economic performance, it is expected that property prices will still fall by 5% in the second half of the year.

However, Cao Deming, chief vice president of the Hongkong mortgage and loan referral, told the twenty-first Century economic news reporter that by the impact of the new crown pneumonia epidemic and the global economy, many central banks around the world have entered the "zero interest rate era", and the Fed has more frequently bought bonds in the market. In the future, the United States is more likely to continue to expand the scale of its balance sheet, coupled with the global implementation of quantitative easing policy. With ample liquidity in the world, the opportunity for capital to continue to flow into Hongkong's banking system will be conducive to the development of the property market.

In fact, the Hong Kong dollar has been strong in recent days and has repeatedly touched the level of convertibility of the 7.75 strong banks. Since June 5th, the Hongkong monetary authority has injected more than HK $27 billion 398 million into the market for the ten time. As of June 10th, the balance of the banking system in Hongkong has been HK $104 billion 525 million, and will increase to HK $122 billion 127 million in June 12th.

Cao Deming believes that in the continuous flow of funds, low interest rates, and Hongkong's current epidemic situation began to improve the three favorable factors to support the situation, it is expected that the property market will continue to fine tune and warmer.