Hong Kong property developers have united in a rare call for the government to lift all remaining cooling measures to breathe life back into the city’s sluggish property sector. Stewart Leung Chi-kin, the chairman of the Real Estate Developers Association of Hong Kong and Wheelock, took the lead in this bold stance, revealing that he recently met with Financial Secretary Paul Chan Mo-po to advocate for the removal of these measures.
While Leung emphasized that Chan did not make any promises, there is growing speculation that the financial chief could announce the relaxation of property market curbs during his upcoming budget speech on February 28. This follows Chief Executive John Lee Ka-chiu’s decision to roll back some curbs in his policy address last year.
The market reacted swiftly to these developments, with the Hong Kong stock market surging to a seven-week high. Property developers were at the forefront of this rally, with Sun Hung Kai Properties, Henderson Land Development, and New World Development all posting significant gains. The Hang Seng Property Index also saw a notable uptick, reaching a one-month high.
Leung remains optimistic about the property market’s prospects, citing the market’s resilience in the face of last year’s high interest rates and stock market volatility. He anticipates that with expected interest rate cuts this year, improving unemployment rates, and the potential removal of cooling measures, the property market will rebound in the second half of the year.
Wheelock, for example, has five projects in the pipeline totaling about 2,200 units, which it plans to launch based on market conditions and the guidelines set in the upcoming budget. Justin Chiu Kwok-hung, CK Asset’s executive director, echoed Leung’s sentiments, stating that the government’s removal of cooling measures would be welcomed by most Hong Kong residents.
However, challenges remain, particularly concerning the pricing of properties. Chiu noted that while the current cost of properties stands at HK$28,000 (US$3,578) per square foot, this figure could rise if interest rates increase further. Despite this uncertainty, developers like CK Asset have shown a willingness to adapt, as seen in their decision last year to launch their cheapest new homes in seven years, a move that paid off with all 655 units at their Coast Line II project in Yau Tong being sold out.
As Hong Kong braces for potential changes in its property market regulations, developers and residents alike are hopeful that these measures will pave the way for a more robust and sustainable real estate sector in the future.
(Source: Bloomberg | SCMP)
