Hong Kong’s property curbs are aimed at curbing short-term speculation and will be good for the market in the long term, said Victor Lui, an executive director of Sun Hung Kai Properties Ltd.’s property arm.
“We have seen the effect already as prices and transactions have both fallen,” Lui said at a shareholder meeting in Hong Kong today. “They are good for the long-term development of the property market.”
The Hang Seng Property Index, which tracks the city’s seven-biggest developers including Sun Hung Kai, has underperformed the local benchmark and sales tumbled after the government on Nov. 19 increased minimum down payments on homes costing more than HK$8 million ($1 million) and imposed additional stamp duties on all units bought after Nov. 20 and resold within two years.
Home values in the city have soared more than 50 percent since January 2009, according to an index compiled by Centaline Property Agency Ltd., Hong Kong’s biggest closely held realtor, prompting government efforts to maintain affordability. Weekend sales of used homes fell 83 percent from the previous week on Nov. 20 and 21, according to Centaline.
Shares of Sun Hung Kai, the world’s biggest developer by market value, have risen 13 percent this year, compared with an 8.3 percent advance in the property gauge. The shares rose 1.6 percent to HK$131.80 at the noon trading break in Hong Kong today.
The latest government curbs won’t delay sales of projects, said Lui. Sun Hung Kai will begin selling projects in Yuen Long, Tuen Mun and West Kowloon districts next year, Lui said.
The group is confident of attaining the same revenue from residential sales as last year, Eric Chow, an executive director at Sun Hung Kai Real Estate Agency, told the shareholder meeting. It had HK$26 billion in residential sales revenue last year.
Transactions of second-hand properties climbed Nov. 27 and 28 as buyer interest shifted to less expensive neighborhoods such as in the New Territories, according to Midland Holdings Ltd. Transactions increased to 20, compared with 14 the previous weekend, according to data from Midland Properties, a unit of Midland Holdings, the city’s biggest realtor by market value.
Residential transactions may fall by as much as 30 percent from current levels of 11,000 units a month over the next quarter, property broker Colliers International Ltd. said.
Sun Hung Kai, controlled by the family of Chairwoman Kwong Siu-hing, built and operates office buildings including the International Finance Centre, a joint development with Henderson Land Development Co., and the International Commerce Centre, the city’s tallest building.
The developer will begin selling two commercial projects in East Kowloon and Cheung Sha Wan by June 2011, Lui said today.
Thomas and Raymond Kwok, sons of Kwong and the company’s late founder Kwok Tak Seng, took over running Sun Hung Kai in May 2008 after ousting elder brother Walter Kwok from the chairmanship. The family’s combined wealth of $17 billion is third on Forbes Magazine’s list of Hong Kong’s richest.
To contact the editor responsible for this story: Andreea Papuc at firstname.lastname@example.org