HK has world's least affordable housing: survey

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Hong Kong has the world's least affordable housing, according to an international survey, a finding that is sure to stoke anger among many residents already fed up with runaway property prices.

Buying a home in the Asian financial hub, synonymous with its super-rich tycoons and glittering financial district, costs more than 11 times the city's average salary, outpacing London, New York and other major cities, US-based consulting firm Demographia said in a report released Monday.

Sydney was ranked the second-least affordable major city, followed by Vancouver, and Melbourne.

The 7th Annual International Housing Affordability Survey compared home prices and household income in 325 cities in Australia, Canada, Hong Kong, Ireland, New Zealand, Britain and the United States.

It was the first time Hong Kong has been included in the survey.Hong Kong's median home prices in the third quarter of 2010 averaged HK$2.58 million ($330,939), about 11.4 times the median household annual income of HK$225,400.

The most affordable homes in the survey were all in the US and Canada, with Saginaw in the US state of Michigan being the most affordable city, where the median house price was $61,400.

Atlanta was the most affordable major city, where the median house price was $129,400.Rising property prices have become a major concern for Hong Kong's population of seven million.

Worries about a property bubble have prompted Hong Kong's government to announce a series of cooling measures, including boosting land supply and new stamp duties to keep out hot money.

Home prices in Hong Kong have risen 50 percent over the past two years, due to low interest rates, a robust economy and an influx of buyers from mainland China, who account for a big portion of purchases, especially for luxury homes.

Buggle Lau, chief analyst at Hong Kong property broker Midland Holdings, said he expected home prices to continue to surge in 2011, but he questioned the Demographia survey's methodology.

"The survey does not take into account more affordable housing in Hong Kong, like government housing," he said.

By AFP

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Hong Kong announces measures to cool property mart

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HONG KONG: Hong Kong's government on Friday unveiled its latest attempt to cool the red-hot property market, amid public anger at spiralling prices and fears highlighted by the IMF of a real estate bubble.

Financial Secretary John Tsang announced a sliding scale of new stamp duties to take effect midnight Friday aimed at restraining what he called "short-term speculative" inflows into the glitzy financial hub's property market.

"These are extraordinary measures under exceptional circumstances. Our aim is to curb short-term speculative activities and to reduce the risk of any asset bubble," Tsang told journalists.

The densely populated city of seven million is famous for its sky-high residential rents and super-rich tycoons. It notably attracts wealthy buyers from mainland China looking for a relatively safe place to invest with high living standards.

But the International Monetary Fund this week urged Hong Kong to rein in soaring prices, amid fears that overheating is spreading from high-end luxury properties to the general market.

Under the levies outlined by Tsang, anyone reselling a property within six months of purchase would be subject to a hefty 15 per cent stamp duty. A 10 per cent duty would apply to sales within six-to-12 months and five per cent to sales within 12-24 months.

Luxury home values in the former British colony recently topped their pre-1997 Asian financial crisis peak, according to government data released in October.

Friday's announcement marks the latest in a series of measures already taken to cool the ever-expanding market.

Stamp duty on luxury property was hiked by half a percentage point in April to 4.25 per cent, while a number of government land auctions have been held to increase supply.

But prices have crept ever higher, and are up 20 per cent in the past year.

The IMF warned in a report on Thursday that, "depending on the amplitude of the upswing, the resulting downturn could prove both protracted and painful".

Concerns have been amplified after the Federal Reserve unveiled a massive stimulus package to kick-start the US economy, raising fears that a flood of speculative money could overheat Hong Kong's volatile asset markets.

The Hong Kong dollar is tied to the greenback, although the IMF reiterated its support for the city's currency system, calling it a "robust anchor of monetary and financial stability".

Earlier this month, the city's biggest realtor, Centaline, recorded the highest commercial property price per square foot in Hong Kong's history.

A 79th floor unit in The Centre - a downtown skyscraper owned by Hong Kong's richest man Li Ka-shing - sold for HK$338 million (US$44 million), or about HK$25,580 a square foot.

Homes with a price tag of at least HK$20 million have surpassed previous highs for both the number of transactions and total sale proceeds, Centaline also said.

Spillover into the lower-end property market, where the vast majority of Hong Kong people live, has seen prices creep ever further beyond the reach of average incomes.

In October, Hong Kong's leader announced a halt to automatic residency for wealthy property buyers, in a move that analysts said was aimed squarely at cash-rich investors from mainland China.

At a rowdy legislative session that was dogged by about 200 protestors denouncing high property prices, Chief Executive Donald Tsang said: "Housing is currently the greatest concern of our people."

By AFP

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HK luxury property market rosy, say experts

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HONG KONG: The latest government land auction, a site in the Kowloon Tong district in Hong Kong, has fetched a higher-than-expected price at US$210 million.

Analysts said the price reflected optimism about luxury property prices in Hong Kong and expected that the government would not be raising curbs on property speculation.

Two developers had earlier bid for the site: Robert Kuok's listed Kerry Properties, which owned an adjacent site and unlisted ChinaChem Group, the property empire of the late Nina Wang.

ChinaChem eventually won with a bid of US$210 million - 55 per cent higher than the opening price, and exceeding expectations.

By AFP

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China's tightening moves to speed up property sales

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HONG KONG: China's series of policy tightening measures to prevent a property bubble from bursting will likely speed up sales of some projects as prices in top tier cities fall, analysts and industry executives said on Monday, Oct 11.

Since April, China has announced a range of measures to curb the sector that is in danger of overheating, including raising downpayments for home purchases and requiring banks to conduct stress tests in case of sharp housing price declines.

Earlier on Monday, sources told Reuters China has raised reserve requirements for six large commercial banks by 50 basis points on a temporary basis, a surprise move to drain cash from the economy, but avoid over-tightening.

"Some developers would speed up project sales from the second half of this year to the first half next year so as to reduce their reliance on loans from banks with the government's measures to reduce liquidity," Evergrande Chief Executive James Xia told a news conference on Monday.

Last week, Shanghai issued new rules to limit home buyers to one new apartment and will impose a revised land appreciation tax. A newspaper also reported that Shenzhen would prohibit local families from buying a third home and those who don't pay local taxes would be barred from buying any unit.

PROPERTY TAX EXPECTED

China will likely introduce a property tax on a trial basis to further clamp down speculation in the sector, especially in first tier cities where prices remain high, though the market is mixed on when the tax might be launched.

Xia said there was a slim possibility that the trial property tax would be introduced this year, though Nie Meisheng, president of the semi-official China Real Estate Chamber of Commerce, told a forum in Beijing earlier on Monday that it would be launched in months.

With the government's series of measures announced this year to cool the property sector, housing prices in top-tier Chinese cities will probably fall by 10 percent over the next 6-12 months, ratings agency Standard & Poor's said.

China's housing prices in top cities, such as Shanghai, Guangzhou and Shenzhen, had fallen by about 10 percent as of the end of August from a peak in April, before the impact of tightening measures started to have a negative impact on the market, S&P credit analyst Bei Fu said.

"We expect such corrections to deepen in the next 6-12 months," Fu said in a media teleconference after the ratings agency issued a report on China's property sector, although she added that the corrections would not be as sharp as in 2008.

"In 2008, we've actually seen probably a 20, 30 percent downward correction in a timeframe of six to nine months. So this time, it's going to more moderate, kind of gradual downward adjustment," she said. Some analysts expect the impact of tightening moves impacting the property market for several months to come.

"We are not so optimistic on the short-term, believing that the government will not easily surrender its current tightening efforts, which have a lagging effect, and will be felt more acutely in the first half of next year," said Wee Liat Lee, regional head of property at Samsung Securities.

By Reuters

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