Bloomberg: Hong Kong Developers Under Pressure to Cut Prices Amid Slowdown

[BlueKelah]

Bloomberg - Hong Kong Developers Under Pressure to Cut Prices Amid Slowdown http://bloom.bg/1VqA7EC

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[Dosser]

Bloomberg - Hong Kong Developers Under Pressure to Cut Prices Amid Slowdown http://bloom.bg/1VqA7EC

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Secondhand prices are also falling, based on the evidence from the windows of my local real estate agents in the NT - lots of stickers showing price reductions. It is essential to read them on the move - stop for more than a few seconds and a Hong Kong Realtor is headed straight towards you with the look of a great white shark that hasn't eaten for a long while and has just spotted a baby seal.

[BlueKelah]

LOL!

likely to crash 50%+ soon once the panic and foreclosures start ramping up and developers start dumping stock. Has happened before decade ago and will happen again, people just don't learn.

[fundamentalman]

agree, property price is too high in hk, rental yield is too low.

not to mention hk govt action to increase supply. Flats are getting unaffordable over there.

[opmi]

HK Govt cannot increase land supply as much unlike SG Govt. Coz they don't have much land supply.
Most of the land are in the hands of the developers.

Will the property price crash 50%? Don't think so.

[BlueKelah]

HK Govt cannot increase land supply as much unlike SG Govt. Coz they don't have much land supply.
Most of the land are in the hands of the developers.

Will the property price crash 50%? Don't think so.

well land prices are already there according to this article...

http://www.businesstimes.com.sg/real-est...ent-tender

[HONG KONG] In the latest sign that Hong Kong's property correction is deepening, a piece of land sold by the government in the New Territories sold for nearly 70 per cent less per square foot than a similar transaction in September.

The 405,756 square foot (37,696 square meter) parcel of land in Tai Po sold for HK$2.13 billion (S$384 million) or HK$1,904 per square foot, in a tender that closed on Feb 12, according to the Hong Kong Lands Department website. The buyer was Asia Metro Investment Ltd, a subsidiary of China Overseas Land & Investment Ltd.

[corydorus]

I am new to HK market. Just curious, is there possibility of developers or related officials colluding ? Seems 70% drops is quite ridiculous not to be noticed or acted.

[jjlim84]

one case doesn't represent the whole. Based on common sense, 70% is ridiculous, if it's really true, a lot of home owners will be in trouble

[BlueKelah]

one case doesn't represent the whole. Based on common sense, 70% is ridiculous, if it's really true, a lot of home owners will be in trouble

http://www.landsd.gov.hk/en/landsale/records.htm

lets keep an eye on future sales. It seems seldom there are tender cancelled, which 2 occured in the last 3 months.

This low tender could be a first case that the market in hongkong has truly turned?

[Dosser]

one case doesn't represent the whole. Based on common sense, 70% is ridiculous, if it's really true, a lot of home owners will be in trouble

The tender was for land, which is only one component of cost of a finished flat. On Hong Kong Island it will be a big % of the total cost, but much less so out in Tai Po, well out in the NT. Secondhand flats are off maybe 10% to 15% from the peak last year - difficult to tell, as there are few transactions. A house on HK Island just sold for 'only' HK$830m, when they were expecting over HK$1b.

There is a big supply of flats coming on-stream - just like Singapore. Combine economic weakness, in Hong Kong and China with boost in supply, and prices are bound to come down. Especially if the US raises interest rates, although that is not so certain now.

Overall, it will be a good thing. Prices were just too high for the ordinary families. Last year, my flat in the NT was 'worth' 6 times what I paid for it in 2003. 6x in 12 years. That is insane. Some people, who have bought in the last 4 years will get burned, but the majority of homeowners bought at much lower prices.