The future of Hong Kong leads today’s set of real estate headlines from around Asia Pacific as chief executive John Lee acts to revive the city’s faltering housing market. Also in the news, Country Garden is formally deemed to be in default and China’s Wanda sells a Shanghai mall to pare debt.
Hong Kong’s property tax cuts are unlikely to reverse the city’s worst real estate slump in two decades. That’s the view of analysts at firms including Jones Lang LaSalle Inc. and MIB Securities Hong Kong Ltd. after Chief Executive John Lee unveiled the first easing of the levies since they were introduced about a decade ago.
The city is halving extra stamp duties targeting non-local buyers and residents who already own a home, Lee said in a policy address on Wednesday. Sellers are also now able to offload properties without paying tax after holding them for two years, down from three previously. Read more>>
Chinese developer Country Garden Holdings Co. was deemed to be in default on a dollar bond for the first time ever, underscoring its fall into distress amid a broader property debt crisis that’s shaken the world’s second-biggest economy.
Country Garden’s failure to pay interest on the note within a grace period that ended last week “constitutes an event of default,” according to a notice to holders from trustee Citicorp International Ltd. seen by Bloomberg News. That means the trustee must declare principal and interest due immediately if holders of at least 25 percent in aggregate principal amount of the notes outstanding demand it. There is no indication that creditors have made any such demand yet. Read more>>
Chinese developers have been selling assets to insurance companies to raise money amid severe debt problems, as the property sector remains sluggish and default is still a big risk for many builders.
Shanghai Wanda Commercial Plaza Property gained a new majority shareholder at the end of last month, after Dajia Life Insurance bought the stake from Dalian Wanda Commercial Management Group. The insurer has bought several commercial properties this year from Wanda Commercial, which has also been selling its stakes in cinemas and equity investment firms to other investors to ease its financial strain. Read more>>
Vietnamese Prime Minister Pham Minh Chinh received Guy Bradley, chair of Swire Properties and Swire Pacific, in Hanoi on Tuesday, welcoming the UK-headquartered firm’s continuous expansion of investment and business activities in Vietnam.
He called on the over-200-year-old Swire Group to continue expanding its operations in such sectors as aviation, trade and industry, logistics, real estate, health care and the production, distribution and retail network in Vietnam; develop human resources, especially high-quality ones; and consider cooperating with local universities and vocational schools. Read more>>
China Resources Land has won a site in Shanghai for nearly RMB 7 billion ($957 million), according to mainland media.
A unit under the state-owned developer secured the plot in Baoshan district at the reserve price yesterday, the reports said. The gross floor area of the residential-cum-commercial site is 369,415.9 square metres (3,976,360 square feet), meaning the cost per square metre is RMB 18,948. The government reference price is RMB 69,000 per square metre, in line with the prices of second-hand homes nearby. Read more>>
The Urban Renewal Authority received 31 expressions of interest from developers, as the submission deadline for the Kai Tak Road/Sa Po Road development project in Kowloon City ended yesterday, but surveyors have cut their estimated price for the site.
The interested developers include Emperor International, China Overseas Land and Investment, Wheelock Properties, CSI Properties, Chinachem and Regal Hotels. Read more>>
China’s economic growth could drop below 3 percent in 2024 if the real estate slowdown deepens, according to S&P Global Ratings, underscoring how the ongoing housing crisis remains a serious drag on the world’s second-largest economy.
In a downside scenario, property sales in 2024 would decline up to 25 percent from 2022, to about $1.4 trillion. S&P estimates that this would shrink China’s real GDP growth to 2.9 percent that year. The rating agency sees a 20 percent probability of it happening with Beijing providing no significant government stimulus to the sector, nor discretionary fiscal or monetary support. Read more>>
China’s government land sales revenue fell for a 21st month in September, data from the finance ministry showed on Tuesday, adding to the woes of local governments already struggling with mounting debt repayments.
Land sales revenues in September fell 21.3 percent from a year earlier, after falling 22.2 percent the previous month, according to Reuters calculations based on the ministry’s data. Read more>>