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Property News Weekly Digest
2020/3/14
〈Xiuhua News, March 13, 2020〉China's top real estate developers reported better profitability last year, the China Securities Journal reported Wednesday.

As of Tuesday, 56 Chinese real estate companies listed on the A-share market and Hong Kong securities market had released their 2019 annual reports, and 29 posted an increase in net profits.

Among them, A-share-listed real estate firms registered generally better performance than their Hong Kong-listed counterparts, the paper said.

Average net profits attributable to shareholders of the 38 Hong Kong-listed property developers shrank 27.58 percent to 3.25 billion yuan (about 466.3 million U.S. dollars), while that of the 18 A-share-listed companies surged 22.67 percent to 3.59 billion yuan.

Most of the companies seeing improved financial results registered expansion in both their assets and debts, the paper said.

However, their asset-liability ratio deducting unearned revenue, which is linked to a property developer's future results, declined on optimized financial accounting, indicating better financial conditions.

〈Asian Post , March 13, 2020〉Investor buying declines as city's woes continue

Transactions in February fall 13pc from last year to 3,572 deals, as landlords wait for sentiment to improve amid epidemic, protests and trade war

Investment in Hong Kong property has almost come to a standstill, as the coronavirus outbreak worsened sentiment already hit by more than six months of anti-government protests and the US-China trade war.

February's transactions declined 13 per cent from last year to 3,572 deals, the lowest monthly tally in four years, comprising newly launched property and older homes, according to estimates by Cushman & Wakefield.

At the high end of the market, which is offices, shops or homes exceeding HK$100 million in value, only 17 deals were done last month, the lowest since 2009, while the average deal size shrank 44.1 per cent to a decade low of HK$235.3 million.

"There is a lack of incentive for transactions," said Tom Ko, executive director of capital markets at Cushman & Wakefield.

"Landlords want to wait until the coronavirus situation eases before selling their property and they have stronger holding power due to low interest rates."

The data underscores the market's gloomy outlook, as the bull run in the world's most expensive property market stumbled after the months of anti-government protests sapped appetite. Now, as the coronavirus outbreak shows no signs of letting up, few buyers dare venture into sales rooms or commit to expensive purchases.

〈The Standard, March 12, 2020〉The coronavirus epidemic is accelerating a shakeout in China's property sector as a cash crunch forces distressed developers to throw in the towel. With lockdowns entering their third month, smaller home builders are being pushed to the brink because they can't get enough money from presales of apartments to cover their costs.

In the first two months of this year, around 105 real estate firms issued bankruptcy filing statements, after almost 500 collapses in 2019.

"A vast number of mid- to small-sized developers will face a choice no one wants to make - either sell their assets and start another business, or be bought out," said China Index Holdings research director Huang Yu. "The shakeout is just beginning."

Even before the new coronavirus, China's housing market was under pressure.

Home prices rose at the slowest pace in almost two years in January and several developers, saddled with debt they're struggling to service, have begun to dial back on construction.

As a result, mergers and acquisitions among the nation's almost 100,000 real estate companies will ramp up again in 2020, Yu said.

"Declining sales will hurt developers' liquidity as the proceeds still form the largest and most important funding source," S&P Global credit analyst Christopher Yip said.

〈The Standard, March 11, 2020〉The shockwaves of the coronavirus that first hit the mainland and Hong Kong are now rolling over to other places in the region and around the world, putting them into states of emergency.

Viral disease experts have warned of a prolonged battle against the epidemic. To the industrial and commercial sectors, it means not only taking health precautions, but also urgently maintaining the viability of the business ecology.

To this end, the Business and Professional Alliance for Hong Kong has urged the administration to ease off on its cooling measures in the property market. The suggestion sparked worries about the resurgence of speculative activities in the market.

Industrial constituency lawmaker Jimmy Ng Wing-ka explained that the suggestion could be limited to non-residential properties so that it would give financial flexibility to businesses, but not affect the common folk.

Anti-overheating measures put in place by the last SAR administration included a scaled additional duty on the sale of a property within three years of purchase. The suggestion at the time to exempt shop spaces and offices was rejected because the market was hot at that time.

Ng said shop rents have come down in recent years and speculation has abated.

With the supply of office space picking up again, relaxing the cooling measures should not unduly affect renting and selling and provide an additional option for businesses that have bought commercial properties in the past few years.

〈China Daily, March 11, 2020〉While the residential property market in key Chinese cities beats a retreat amid the coronavirus outbreak, prices of pre-owned homes in Shenzhen have defied the trend.

Experts warned of speculative activities in the particular market as prices of new homes have been strictly curbed.

In February, data from real estate agency Centaline Property show the average price of pre-owned homes in the coastal city increased 1.38 percent over the previous month, while it already had surged 2.3 percent in January.

According to the National Bureau of Statistics (NBS), the price index of pre-owned homes in Shenzhen soured 0.7 percent in January, while the percentages of Beijing, Shanghai and Guangzhou are less than 0.4 percent.

In addition, the growth is on the foundation of a sharp jump at the end of 2019, in contrast to national trend.

According to the NBS, up to one-third of 70 major cities it has tracked have seen their pre-owned home price index fall since the middle of last year.

Among the nation’s four top-tier cities, Beijing’s home prices have been on the wane since July, having gone down accumulatively by 0.5 percent throughout 2019, while Shanghai has seen a 1.3 percent surge.