{"id":4864,"date":"2023-10-24T03:44:20","date_gmt":"2023-10-24T03:44:20","guid":{"rendered":"https:\/\/infundpros.com\/business\/hong-kong-developer-declares-end-of-golden-era-for-city-housing\/"},"modified":"2023-10-24T03:44:20","modified_gmt":"2023-10-24T03:44:20","slug":"hong-kong-developer-declares-end-of-golden-era-for-city-housing","status":"publish","type":"post","link":"https:\/\/infundpros.com\/?p=4864","title":{"rendered":"Hong Kong developer declares end of \u2018golden era\u2019 for city housing"},"content":{"rendered":"<div>\n<p>Unlock the Editor\u2019s Digest for free<\/p>\n<p class=\"article__content-sign-up-topic-description\"><span>Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.<\/span><\/p>\n<p><iframe class=\"article__content-sign-up-iframe close\" scrolling=\"no\" id=\"signUpIframe\" data-prev-url=\"\/register\/in-article-sign-up?ft-content-uuid=ad4f17a9-9418-457a-9fa3-9f0ec582fde6\"><\/iframe><\/div>\n<div id=\"article-body\">\n<p>The chief executive of a leading Hong Kong property group has declared the end of a \u201cgolden era\u201d for the territory\u2019s residential developers as the government takes an increasingly active hand in boosting housing supply. <\/p>\n<p>\u201cHong Kong real estate is no longer a totally free market,\u201d said Donald Choi, chief executive at Chinachem, a large unlisted developer and one of the top sellers of new flats in the city. \u201cThe government wants to take more initiative in controlling how land and housing is supplied.\u201d<\/p>\n<p>Choi said Hong Kong\u2019s government had continued to launch tenders for new plots of land for building, despite lacklustre demand after several years of strain for the city\u2019s economy. Previous administrations have typically halted land auctions when the city\u2019s economy slowed in order to put a floor under prices.<\/p>\n<p>\u201cThe golden era of high profit margins in the housing market is over,\u201d he told the Financial Times. \u201cDevelopers need to get into different property asset classes \u2014 not just housing, but data centres, factories and other asset classes of the new economy.\u201d<\/p>\n<p>That shift comes as China\u2019s central government in Beijing has sought to expand affordable housing in Hong Kong, in line with Chinese leader Xi Jinping\u2019s \u201ccommon prosperity\u201d drive. <\/p>\n<p>\u201cThe wealth gap makes homes very unaffordable for normal citizens,\u201d Choi said. \u201cAs a result, the [Hong Kong] government has the intention to correct that.\u201d<\/p>\n<p>Hong Kong has also introduced conditions for mass-market housing projects that require developers to reserve some units for first-time buyers at a capped price. <\/p>\n<p>At one land auction that closed in August, the government required all of the 1,940 homes planned for the site to be sold at below market rates. The resulting lack of interest from developers eventually prompted the government to withdraw the tender.<\/p>\n<p>As a result of such requirements, Choi said, \u201cprivate sector developers are turning to other options so that they can have more control over their developments\u201d. <\/p>\n<p>Rather than bidding for new plots that come with restrictions, some large developers are applying to rezone agricultural land that they already own for residential development, he explained. <\/p>\n<p>The Hong Kong government said its \u201cprime concerns are not developers\u2019 profit margins\u201d but \u201cwhether private housing is affordable to our people\u201d.<\/p>\n<p>New land plots would continue being \u201cput to market in an orderly manner to ensure a steady supply\u201d, it added, which \u201cshould not be affected by short-term market fluctuations\u201d.<\/p>\n<p>Hong Kong\u2019s property market, among the most expensive in the world, rose in tandem with the explosion of wealth in China. But the sector has been hit by an exodus of residents spurred by Beijing\u2019s political crackdown on the city and strict coronavirus pandemic controls, which were only lifted late last year.<\/p>\n<p>This year the Hang Seng Properties index \u2014 which includes groups such as CK Asset, Henderson Land and Sun Hung Kai \u2014 has fallen by about a third, with the US Federal Reserve\u2019s \u201chigher for longer\u201d rates adding to pressure on share prices. <\/p>\n<p>Choi said that due to the government\u2019s policy shift, he expected that \u201cbig property developers will continue to diversify outside Hong Kong, not just investing in China but also in the UK, Singapore, Malaysia and so on\u201d.<\/p>\n<p>Chinachem has made a series of investments in the UK over the past two years. In September 2022, the company paid more than \u00a3158mn to buy TikTok\u2019s London office block, and in January this year acquired another office building in the city currently used by Deloitte for \u00a3350mn.<\/p>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.ft.com\/content\/ad4f17a9-9418-457a-9fa3-9f0ec582fde6\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Unlock the Editor\u2019s Digest for free Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter. The chief&#8230;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[22],"tags":[],"class_list":{"0":"post-4864","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-business"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Hong Kong developer declares end of \u2018golden era\u2019 for city housing | inFundPros<\/title>\n<meta name=\"description\" content=\"Unlock the Editor\u2019s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.The chief executive of a\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/infundpros.com\/?p=4864\" \/>\n<meta property=\"og:locale\" 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