HK Home Prices Near Their Peak Says JP Morgan and More Asia Real Estate Headlines

Leading today’s news, after developers jacked up new home prices in Hong Kong by as much as 40 percent this month, analysts at JP Morgan are calling a peak to the city’s housing market. Also in the headlines, investors turned up their noses at Link REIT’s $590 million Guangzhou mall acquisition, and sales of Shanghai second-hand homes continue to soar. Read on for all these stories and more.

HK Home Prices Near Their Peak Says JP Morgan

Hong Kong housing prices are close to their peak and economically “unsustainable,” said Cusson Leung, managing director at J.P. Morgan Chase & Co.’s Asia Pacific equity research unit.

Price increases in the world’s most expensive home market have outpaced Hong Kong’s gross domestic product growth “significantly” since 2009, and any external shocks could trigger tighter liquidity in the city’s banking system, increasing home buyers’ borrowing costs, Leung said in an interview. Read more>>

Link REIT Shares Fall After Guangzhou Mall Purchase

Shares of Link Real Estate Investment Trust (Link Reit), which owns shopping centres, markets and car parks in Hong Kong fell after it announced it had bought a shopping centre in Guangzhou for 4.06 billion yuan (US$590 million).

The company announced on Sunday that it has purchased the retail property, Metropolitan Plaza, from Barrel Holdings (Cayman), which is indirectly owned by NH Vendor Guarantors, which has a 41.2 per cent stake, and GC Vendor Guarantor, which holds 58.8 per cent. Read more>>

Risky Mortgages Worry Hong Kong Central Bank

Hong Kong’s de facto central bank expressed concern about the riskiness of mortgages with high loan-to-value ratios issued by developers. Its concern comes as certain analysts warned that local home prices are unsustainable.

“The accumulation of these high LTV mortgages may change the risk profiles of these property developers to which banks may have exposures,” said Raymond Chan, executive director for banking supervision at the Hong Kong Monetary Authority. Read more>>

Sales of 2^nd-Hand Homes Double in Shanghai During March

Sales of pre-owned homes more than doubled in Shanghai last month after the traditional low season ended.

Around 19,400 units of pre-owned homes changed hands in March across the city, up from 9,400 units sold a month earlier, according to data compiled by Shanghai Homelink Real Estate Agency Co. But they plunged 61.8 percent year on year. Read more>>

Top Mainland Property Developers See Sales Surge 69% in Q1

China’s major property developers saw sales surge in the first quarter despite government controls on the real estate market, Shanghai Securities News reported Saturday. Twenty-one listed developers recorded 621.6 billion yuan ($90.1 billion) of combined sales in real estate contracts signed in Q1, up 69 percent year on year, the newspaper reported.

China Vanke, the country’s leading residential developer, posted a 99.7-percent jump in sales, which totaled 150.3 billion yuan in the first quarter. Read more>>

S$685M Bid Triggers Singapore Residential Land Sale

In a sign property developers are hungry for land amid improving market sentiment, a large residential site for private homes in Queenstown has been triggered for sale.

A developer committed to bid at least $685.25 million for a 2.11ha Stirling Road site, able to yield about 1,110 units, the Urban Redevelopment Authority said yesterday. Unlike sites on the confirmed list which go on sale automatically, sites on the reserve list are put up for sale only after a bid acceptable to the Government is received. Read more>>

Prices for 2^nd-Hand Singaporean Luxury Homes Rise for 5^th Straight Month

Resale prices of non-landed private homes in Singapore rose for the fifth straight month to a 2½-year high, according to SRX Property’s flash estimates released on Tuesday (April 11).

SRX’s private resale index reached 168.8 last month, the highest since September 2014.

In other bullish indicators for the private resale market, the number of units sold improved by over 50 per cent from the previous month while buyers hiked their asking prices from below perceived market rates where they had been languishing for many months. Read more>>

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