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Thursday, December 29, 2016, 23:56

Headway in bid to stymie homes woes

By Oswald Chan
Headway in bid to stymie homes woes
Another residential site at Kai Tak — which housed Hong Kong’s former airport — will be up for grabs  in the next three months. The government is on track to exceed its annual target of supplying land for 18,000 private homes by the end of March next year. (Photo provided to China Daily)

Hong Kong may be seeing a ray of hope in its beleaguered property sector, with more than 3,600 private residential flats due to come on stream in the fourth quarter of the 2016-17 fiscal year (January-March 2017).

This would exceed the government’s target for the entire fiscal year by more than 8 percent, according to Secretary for Development Paul Chan Mo-po.

Taking into account the government’s land sales program, MTR Corporation’s railway property development, redevelopment projects undertaken by the Urban Renewal Authority (URA), as well as private developers’ lease modifications and redevelopment projects, some 3,610 new apartments will flood the local property market.

Taking into account the government’s land sales program, some 3,610 new apartments will flood the local property market in the fourth quarter

MTR Corporation’s residential projects on Kam Sheung Road, Yuen Long and in Wong Chuk Hang on southern Hong Kong Island could contribute 2,450 flats, while URA projects in Central could provide another 115 units.

"The government had already supplied 15,000 units in the first three quarters of the current fiscal year. Together with the fourth quarter’s figure, the government is confident that the whole-year residential supply target of 18,000 units can be exceeded by 8 percent,” Chan said on Thursday.

He said more than 5,000 apartments could be available in the first quarter of the 2017-18 fiscal year (April –June 2017), and details will be released in February next year.

"Though the supply figure may fluctuate for some time, the administration is striving to make land supply consistent, stable and meet the target,” he said.

Real-estate advisory company Jones Lang LaSalle said it expected the supply of private residential flats to hit 20,000 units annually between 2017 and 2019, leading to a scenario of increased supply amid depressed market demand following the government’s latest measures to cool the runaway property market.

Last month, the government imposed a flat stamp duty rate of 15 percent on property transactions involving individual buyers (except first-time Hong Kong permanent residents) and corporate buyers — up from the previous 1.5 percent to 8.5 percent rates. As non-resident and corporate homes buyers are subject to an additional 15 percent buyer’s stamp duty, the new measure means an effective tax rate of 30 percent for the two categories of purchasers.

Henry Cheng Kar-shun, who heads New World Development Company — one of Hong Kong’s biggest developers — declined to comment on the aggressive approach adopted recently by some Chinese mainland developers in bidding for residential land in Hong Kong, saying the market environment is the key factor.

"Our decision on whether to join in the bidding depends very much on the macroeconomic environment,” he said.

"Hong Kong property prices depend on the pace and magnitude of US interest-rate hikes, as this concerns the affordability of local homes buyers in repaying their mortgage loans,” he added.

The one-month Hong Kong Interbank Offered Rate (HIBOR) — the basis for determining HIBOR-linked mortgage loan interest rates — recently shot up to above 0.7 percent — 52 percent higher than the 0.46 percent recorded in early December.

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