Property shapes for hefty price falls

Finance | Avery Chen 18 Sep 2019

The Hong Kong property market is expected to see prices fall by eight to 13 percent in the next few months after a loss of confidence spawned by economic and political uncertainties, according to wealth management company Harris Fraser.

Investment analyst Steven Wong also projects that home prices will slow for the next four years because of a mix of volatility and the supply of new private residential properties surpassing demands for self-occupancy.

Given that Hong Kong faces demographic changes, Wong added, purchasing power for small and tiny flats that are targeted at first-time buyers will likely decline after 2022. So the upside potential for home prices of such units is limited.

Meanwhile, Henderson Land Development (0012) completed ownership consolidation at five old buildings on Whampoa Street, Hung Hom, for a total of HK$2.14 billion, or HK$12,038 per square feet, based on a maximum rebuildable floor area of 177,500 square feet.

In the commercial property sector, the shop vacancy rate in four core districts - Causeway Bay, Tsim Sha Tsui, Central and Mong Kok - rose 0.9 percentage points year-on-year to 6.5 percent in July-August.

That was due to the China-US trade war, yuan depreciation, retailers' difficulties in hiring and the continuing protests, Midland IC&I (0459) said yesterday.

Midland also expects the decline in the four core districts' shop rents to accelerate in the fourth quarter. So it forecasts a 10-15 percent drop in the second half.

On deals, SEA Holdings (0251) acquired a majority share of Winway Building at 50 Wellington Street, Central, for HK$780 million, real estate adviser Savills said yesterday.

And EPIC Capital, founded by Patrick Kwok Ho-chuen, the youngest son of Simon Kwok Siu-ming, chairman and chief executive of Sa Sa International (0178), bought 90 percent ownership in four floors of Wong's Building in Kwun Tong for HK$330 million.



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