Hong Kong Real Estate : Amidst a sluggish recovery in Hong Kong’s real estate market, HSBC Global Research predicts unsatisfactory company performance. The broker highlights three major concerns: a rising office mortgage cap rate, exponential interest rate increases, and a weakened RMB impacting profitability.
The investment and tenant prices have suffered as middlemen adjust to the current market conditions. Investors show a preference for SHK PPT (00016.HK) -0.650 (-0.655%) due to its predictable profits. Meanwhile, WHARF REIC (01997.HK) gained 0.200 (0.483%) after executing short sales worth $56.59 million at 26.387%. These short sales earned a substantial $19.63 million at 10.97%.
Here’s a look at HSBC Global Research’s ratings and target prices for Developers and Landlords (Table):
| Company | Stock Code | Rating | Target Price (TP) |
|---|---|---|---|
| Hongkong Land | N/A | N/A | N/A |
| CHAMPION REIT | 02778.HK | N/A | N/A |
| Henderson Land | 00012.HK | N/A | N/A |
| Kerry PPT | 00683.HK | N/A | N/A |
| HYSAN DEV | 00014.HK | N/A | N/A |
| Hang Lung PPT | 00101.HK | N/A | N/A |
| Wharf Holdings | 00004.HK | N/A | N/A |
Hongkong Land and CHAMPION REIT experienced a rise of 0.50 points or 1.748%, and $216,14K was sold short at 6.508%. In contrast, Henderson Land rose 0.100 (0.413%). However, the current surplus of offices compared to renters makes short selling $15.41 million at a 30.203% ratio riskier, as office cap rates may rise, causing rents and prices to suffer.
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As interest rates continue to rise, the second half of 2023 may see a decline in earnings forecasts. This could affect companies like Kerry PPT (00683.HK) -0.020 (-0.118%), where short sales amounted to $577,75K at a ratio of 3.645%, and HYSAN DEV (00014.HK) -0.100 (-0.531%). The survey reveals that Henderson Land profited the most from short sales.
Furthermore, the weakening of RMB is expected to impact China-focused corporations, such as Hang Lung PPT (00101.HK) +0.020 (+0.167%). Additionally, Kerry PPT and Wharf Holdings (00004.HK) +0.060 (+0.325%) experienced $887,96K in short sales, with an 8.532% ratio.
Please note that HK pricing quotations are 15 minutes delayed, and the short sale data is as of July 28, 2023, at 16:25.
CICC points out two themes that may strengthen China’s real estate policy over the next three to six months.
Our Reader’s Queries
Can foreigners buy property in Hong Kong?
Foreigners and expats (with a few exceptions) are permitted to purchase and lease properties in Hong Kong. However, the stamp duty cost for non-permanent residents is significantly higher than that of permanent residents. Foreigners are required to pay a staggering 30% of the total stamp duty.
How much does a house cost in HK?
Get a glimpse of the Hong Kong real estate market with the latest average house prices as of May 2023. The prices per square meter vary depending on the property size. For properties ranging from 40-69.9 sqm, the average price is 162,685 HKD, while for 70-99.9 sqm properties, it’s 196,266 HKD. For larger properties ranging from 100-159.9 sqm, the average price is 230,570 HKD. Stay informed with the latest trends in the Hong Kong real estate market.
Are Hong Kong property prices falling?
The housing market in Hong Kong is facing a major slump, with prices hitting their lowest point in almost seven years. The latest government data shows that prices have fallen for the seventh consecutive month, with little relief in sight for the foreseeable future. This is a worrying trend for homeowners and investors alike, as the market shows no signs of recovering anytime soon. Despite the challenging conditions, it’s important to stay informed and keep a close eye on the market to make informed decisions.
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In Hong Kong, you can expect to pay a minimum of 15,000 HKD (1,900 USD) per month for a basic one-bedroom apartment located further away from the city center. However, if you desire a larger living space with more amenities or a location closer to the center, be prepared to shell out at least 20,000-30,000 HKD (2,550-3,850 USD) per month or more.