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South China Morning Post
30-06-2025
- Business
- South China Morning Post
Rebound in Hong Kong's home prices unlikely to come this year: analysts
The improving sentiment in Hong Kong's property market has spurred hope for a sustainable recovery in home prices, but analysts suggest the rebound is unlikely to come this year due to an uptrend in mortgage rates and a nagging supply glut. As of Friday, about 9,150 first-hand transactions had been recorded so far this year, a 3.9 per cent increase from a year earlier and a six-year high since 11,580 transactions were recorded in the first half of 2019, according to agents. Growth for lived-in homes was more muted. An index measuring secondary home prices inched up 0.03 per cent in May from a month earlier after rising slightly in April, according to the Rating and Valuation Department. In the first five months of the year, second-hand home prices declined 0.9 per cent. Meanwhile, rents in the city climbed 0.67 per cent in May from a month earlier, the sixth consecutive month of increases. As rents rise and home prices drop, rental yields on the city's residential properties have been increasing, said Edward Chan, director at S&P Global Ratings. 'We estimate the average gross rental yield for Hong Kong's private homes to be about 3.5 per cent,' he said. 'Based on a mortgage rate of about 2.3 per cent, a [Hong Kong interbank offered rate (Hibor)] of less than 1 per cent plus a margin of about 1.3 per cent, there will be a positive carry.'
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Business Standard
19-05-2025
- Business
- Business Standard
Home prices in China fall at a faster pace during tariff war with US
China's home prices fell at a faster pace in April, signalling the property market slump remains a headache for policymakers as they fend off a tariff war with the US. New-home prices in 70 cities, excluding state-subsidised housing, dropped 0.12 per cent from March, when they declined 0.08 per cent, National Bureau of Statistics figures showed Monday. Values of used homes slid 0.41 per cent, compared with a 0.23 per cent drop a month earlier. The trade war risks worsening the housing slump that has dragged on economic growth and has only recently been showing signs of abating. While the US and China made a truce on tariffs last week, trade ructions may add to woes for workers in the export-driven economy, curtailing housing demand. 'The elephant in the room is China's property market,' ANZ Group Holdings Ltd. economists led by Raymond Yeung wrote in a recent note. 'The tariff shock is caused by the unpredictability rather than the tariff itself.' From a year earlier, declines in values eased. New-home prices fell 4.55 per cent, less than March's 4.99 per cent drop, the statistics bureau said. Existing-home prices slid 6.76 per cent, compared with a 7.25 per cent decrease a month earlier. Chinese leaders signalled last month that they will take a patient approach in defending growth despite the deepening trade war with the US, pledging to 'fully prepare' emergency plans to ward against increasing external shocks. Authorities reiterated their commitment to existing programmes to aid the property sector, such as renovating urban villages and run-down homes while streamlining policies for local governments to buy unsold homes. Top officials have signalled that a recovery in the property sector will help to shield the country from the US tariff hikes. China has been shifting to pro-consumption policies, including an effort to boost household income, provide more consumption subsidies and strengthen the social safety net. 'We believe the government has become more determined to reboot the property sector,' said Edward Chan, credit analyst at S&P Global Ratings. 'This will be key to supporting consumer confidence, which Beijing has identified as its economic priority.'
South China Morning Post
05-03-2025
- Business
- South China Morning Post
Chinese developer Longfor's bonds sink deeper into junk territory as home sales sputter
Beijing-based Longfor Group is the latest firm to see its bonds downgraded further into junk territory, as weakening sales plague China's beleaguered property developers despite the central government's recent support measures to revive confidence. Advertisement S&P Global Ratings on Wednesday downgraded Longfor's long-term issuer credit rating to BB from BB+ and its senior unsecured notes to BB- from BB, citing concerns that the company's contracted sales could remain under pressure through next year due to a further depletion of saleable resources. The company's contracted sales could decline a further 13 per cent this year to 89 billion yuan (US$12.3 billion), the ratings agency said. Longfor's gross profit margin from property development was expected to remain suppressed at 5 to 6 per cent, down from 11 per cent in 2023, as its focus on clearing inventory continued to weigh on profitability, S&P said. 'While we believe the company will be able to reduce adjusted debt of about 10 billion yuan each year in 2025 [and] 2026 using its growing rental and service income, weakness in property development will partially offset this,' wrote S&P analysts Wilson Ling and Edward Chan. The downgrade comes as China's developers continue to struggle with lacklustre sentiment among homebuyers. The property market crisis is now in its fourth year after Beijing introduced measures in late 2020 to deleverage developers and deflate a housing bubble. Advertisement
