News / Asia

Asia's Wealthiest Man: HK Property Speculators Beware

Chinese tycoon Li Ka-shing in front of Hutchison Whampoa company logo, Hong Kong, March 26, 2013.
Chinese tycoon Li Ka-shing in front of Hutchison Whampoa company logo, Hong Kong, March 26, 2013.
Reuters
A series of tightening measures have put the brakes on Hong Kong's overheated property sector, forcing developers to cut prices and prompting a warning from Asia's richest man Li Ka-shing: speculators stay away.

Developers say a sixth round of cooling measures imposed last month to rein in prices and to avoid an asset bubble are now having an impact on sales.

"If you are speculating, I would suggest that you stay away in such a volatile market because no one knows what will happen next," Li told a news conference after his company Cheung Kong [Holdings] Ltd. announced its first annual decline in net profit in five years.

"Look at your pocket first and don't take risks," Li said.

In late February, Financial Secretary John Tsang imposed a new round of steps to curb prices that have doubled since 2008, saying they were needed to keep the potential economic risk from spreading in the financial hub.

The new measures included higher stamp duties and home loan curbs on property transactions.
 
In the first three weeks of March, second-home transactions plunged to their lowest since the outbreak of Severe Acute Respiratory Syndrome (SARS) in 2003, when Hong Kong's real estate market hit an all-time low, according to data from property agent Midland Realty.
 
"We only recorded two deals from the 10 large-scale residential estates during the past two weeks," said Wong Leung Sing, an analyst at Centaline Property Agency, who described the market as the worst he's ever seen.
 
"The market might head in two different directions: Prices stay the same with a plunge in transactions, or prices will just collapse," Wong added, explaining that home prices may drop as much as 20 percent in the second quarter.
 
Sun Hung Kai Properties Ltd., the world's No.2 property company by market value, has also cautioned about the impact of the tightening measures and lowered its sales target for this financial year by 9 percent.
 
Analysts say Cheung Kong has been forced to cut prices to boost sales in a lethargic market.
 
Cheung Kong, Hong Kong's second-largest property developer after Sun Hung Kai Properties, cut the price of a new project in the city by 6 to 17 percent, according to Macquarie Equities Research.
 
Cheung Kong on Tuesday logged a 30 percent fall in 2012 net profit from a year earlier, although the total net profit of HK$32.2 billion ($4.1 billion) beat analysts' expectations.
 
Over the past three years, property prices have surged in Hong Kong, one of the world's most expensive property markets, on ultra-low interest rates, tight supply and abundant liquidity.
 
Correction on the cards

Along with government tightening, a number of banks raised mortgage rates by 25 basis points earlier this month.
 
"We think the rate hike has psychological impact more than actual impact to buyers," Dennis Wu, research analyst at Phillip Securities, wrote in a note last week.
 
Wu said a big drop in property prices in the past was only triggered by major events, such as the financial crisis in 1997 and the SARS outbreak in 2003.
 
"But in view of property prices at historically high levels, government damping non-user demand and some property developers offering a price discount, we maintain a 5 to 10 percent reasonable correction forecast for 2013 property prices."
 
Despite signs of slowdown, the Centa-City Leading Index, a widely used indicator of the city's residential price trends, is now at a record 123.7. That's 1.7 percent higher than mid-February.
 
Property developers in the Chinese special administrative region have so far seen limited impact from ongoing government tightening.
 
On Monday, Henderson Land Development Co Ltd. recorded a 28 percent year-on-year rise for 2012 underlying profit, while Agile Property Holdings Ltd.'s net profit rose 22 percent during the same period.
 
Henderson said in statement the cooling measures had resulted in a moderate downtrend in property prices and a drastic drop in property transactions.

You May Like

Kurdish Party Pushes Political Gamble to Run in Turkey Poll

HDP announces it will run as political party instead of fielding independent candidates in June election, but faces tough 10 percent threshold More

Twitter Targets Islamic State

New research shows suspending Twitter accounts of Islamic State, its supporters has been effective; group, its backers are facing 'significant pressure,' says terrorism expert More

Video Former Sudan 'Lost Boy' Becomes Chess Master in NYC

Majur Juac made the leap from being a refugee in Africa to a master chess champion in US, where he shares his expertise with students More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
NASA Monitors Earth’s Vital Signs From Spacei
X
Rosanne Skirble
January 27, 2015 5:05 PM
The U.S. space agency, NASA, is wrapping up its busiest 12-month period in more than a decade, with three missions launched in 2014 and two this month, one in early January and the fifth scheduled for January 29. As VOA’s Rosanne Skirble reports, the instruments being lifted into orbit are focused on Earth’s vital life support systems and how they are responding to a warmer planet.
Video

Video NASA Monitors Earth’s Vital Signs From Space

The U.S. space agency, NASA, is wrapping up its busiest 12-month period in more than a decade, with three missions launched in 2014 and two this month, one in early January and the fifth scheduled for January 29. As VOA’s Rosanne Skirble reports, the instruments being lifted into orbit are focused on Earth’s vital life support systems and how they are responding to a warmer planet.
Video

Video Saved By a Mistake - an Auschwitz Survivor's Story

Dagmar Lieblova was 14 when she arrived at Auschwitz in December 1943, along with her entire Czech Jewish family. All of them were to die there, but she was able to leave after several months due to a bureaucratic mix-up which saved her life. Now 85, with three children and six grandchildren, she says she has a feeling of victory. This report by Ahmad Wadiei and Farin Assemi, of RFE/RL's Radio Farda is narrated by RFE’s Raymond Furlong.
Video

Video Weekly Protests in Korea Keep Japanese WWII Atrocities Alive

Every week in Seoul protesters gather in front of the Japanese Embassy to demand an apology and reparations from Tokyo for the thousands of South Korean women who were forced into prostitution during World War II. Although this year marks the 70th anniversary of the end of the war, these protestors have helped keep the issue of comfort women alive and made it difficult for Japan to move beyond its past wartime atrocities. VOA's Brian Padden reports from Seoul.
Video

Video Exercise: New Prescription for Parkinsons Disease

Exercise could be the new prescription for Parkinson's Disease, a progressive disorder of the nervous system that affects movement. More than six million people worldwide suffer from Parkinsons and they're traditionally treated with medication and surgery. Shelley Schlender has more.
Video

Video Brussels Shaken as New Greek Leader Challenges Europe’s Austerity Drive

Greece’s youngest-ever prime minister, 40-year-old Alexis Tsipras, was sworn in Monday after his victorious far-left Syriza party entered a coalition with far right rivals. Tsipras says he will restore dignity to Greece by ending spending cuts. So begins a new chapter for the country at the epicenter of Europe’s economic crisis - a change that has sent tremors across the continent, as Henry Ridgwell reports from London.
Video

Video Obama Urges Closer Economic Ties During Historic India Visit

U.S. President Barack Obama says the United States and India must do better to capitalize on untapped potential in their economic relationship - by removing some of the roadblocks to greater trade and investment. As VOA correspondent Aru Pande reports from New Delhi, Obama spoke after participating in India’s Republic Day celebration.
Video

Video White House Grapples With Yemen Counterterrorism Strategy

Reports say the U.S. has carried out a drone strike on suspected militants in Yemen, the first after President Barack Obama offered reassurances the U.S. is continuing its counterterrorism operations in the country. The future of those operations has been in question following the collapse last week of Yemen’s government. VOA White House correspondent Luis Ramirez reports.
Video

Video Worldwide Photo Workshops Empower Youth

Last September, 20 young adults from South Sudan took part in a National Geographic Photo Camp. They are among hundreds of students from around the world who have learned how to use a camera to tell the stories of the people in their communities through the powerful medium of photography. Three camp participants talked about their experiences recently on a visit to Washington. VOA’s Julie Taboh reports.
Video

Video US, Japan Offer Lessons as Eurozone Launches Huge Stimulus

The Euro currency has fallen sharply after the European Central Bank announced a bigger-than-expected $67 billion-a-month quantitative easing program Thursday - commonly seen as a form of printing new money. Henry Ridgwell reports for VOA from London on whether the move might rescue the eurozone economy -- and what lessons have been learned from similar programs around the world.
Video

Video Oil Price Drop Troubles Texas Producers

As oil prices have fallen over the past several months, drilling operations have slowed in some parts of the United States - including Texas, the state that surpasses all others in energy production. The Lone Star State’s energy output has been boosted in recent years by development of resources trapped deep below ground in the Eagle Ford shale deposit, which stretches across south central Texas. As VOA’s Greg Flakus reports from Karnes City, Texas, the drop in oil prices has created concerns,
Video

Video Nigerian Elections Pose Concern of Potential Conflict in 'Middle Belt'

Nigeria’s north-central state of Kaduna has long been the site of fighting between Muslims and Christians as well as between people of different ethnic groups. As the February elections approach, community and religious leaders are making plans they hope will keep the streets calm after results are announced. Chris Stein reports from the state capital, Kaduna.
Video

Video As Viewership Drops, Obama Puts His Message on YouTube

Ratings reports show President Obama’s State of the Union address this week drew the lowest number of viewers for this annual speech in 15 years. White House officials anticipated this, and the president has decided to take a non-traditional approach to getting his message out. VOA White House correspondent Luis Ramirez reports.

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More

All About America

AppleAndroid