CY LEUNG & his 500M House at the Peak

Now CY Leung is in trouble - it is maybe exaggerated - I dont know - but it is welcome to all his critics - please read here: CY's critics seek no confidence motion 24-06-2012 The Labour Party says it aims to move an emergency motion of no-confidence against Chief Executive-elect, C.Y. Leung, amid controversy over illegal structures uncovered at his Peak residence. Mr Leung -- a surveyor -- has accepted full responsibility for the unauthorised building works, even though he also says he wasn't aware they were illegal. The Labour Party's chairman, lawmaker Lee Cheuk-yan, said he hoped Legco president Tsang Yok-sing will waive the 12-day notice requirement so the motion can be moved on Wednesday. Mr Tsang said he would study the reasons behind the motion of no confidence before deciding whether to approve it for Wednesday or not. Speaking after RTHK's City Forum, a vice-chairman of the Democratic Party, Emily Lau, said it was too early to say if her party would back the no-confidence motion -- but she could not rule it out. The party's central committee will hold an urgent meeting tomorrow night to discuss the issue and decide the next step. Legislator Miriam Lau, who heads the pro-establishment Liberal Party, said she would like to see an investigation first into whether Mr Leung had lied, before deciding what should come next. She said Mr Leung should be given a chance to explain fully.

Just some short thoughts on Donald Tsang......

So now Donald is the one taking the bullet - sacrificing himself with some kind of scandal to distract the attention from Henry Tang. In Beijing today the focus was "TO UNITE" and build up a harmonious & stable society - so ? The typical CRAP like always ........... Lets bet who will be the next CE of Hong Kong ? Believe me it will be that guy who does not know how to speak properly (not in cantonese & not in english anyhow): Yes - HENRY TANG ! Especially this post also wearing the label HONG KONG PROPERTY - think about why ....................... Maybe then in the next budget speak every Hong Kong resident wil get a bottle of red wine from Henry ? I want a 1997 Pomerol please !

KINGS CUBE - ABOUT LIVING IN THE CUBE

The idea for the above videa was triggered by this one (only in cantonese) - 400 sqf for HKD 6 Miliion - and it is already very small.

Living in a cubicle in ASIA'S WORLD CITY

This is just reality for many people, families here in Hong Kong. Please read the below - also remember the fire a few days ago in a building with many divided flats killing 4 people because they could not get out in time:
CUBICLE LIFE

Sell, buy, rent, lease property in Hong Kong without agent

Here the link to a good site called zero agent property - ZAP !
This is a good idea. The site is quite new so not so many projects listed there and unfortunately
most of them in the typically "expat districts". Lets hope it will get more and more with the time.
Actually it is no need to use some of this agents to sell, buy or rent / lease out your HK property.
Please spread the site it's worth having something like that - please click here:
ZERO AGENT PROPERTY
Please note this link I have put on my blog list on top - use it - spread it - save the money paid to agents for what ?

THIS PROFESSOR IS NUTS......

according to professor Eddie we shall all not complain about the crazy Hong Kong housing prices as there are enough options like public housing or HOS scheme - eeehh sorry professor: Where are you living (def not in Kwung Tong public housing estate or Sham Shui Po cage appartment) - and in what world are you living ? Also professor Eddie not every family of four or five wants to live in a 568 sqf appartment with 2 bedrooms and the whole space is like a bigger shoe-box - means around 40 sqm maximum - I really hate these kind of comments from so-called experts.
And then Eddie suggests to better analyze what "proportion of household income is spent on housing". Okay - do the math Mr Eddie - so families earning HKD 20,000 a month spent how much on housing ? I am waiting your analyzing - but it still will not change the fact that even for the cage homes the rents are almost the most expensive ones in whole Hong Kong.
Have a good day Professor Eddie !
Here is the article copied form THE STANDARD today:
HK top of housing tree
Tony Liaw andEllen Wang
Tuesday, January 25, 2011
Homes in Hong Kong cost more than 11 times average salaries, making them the least affordable among major global cities.
That makes buying a home here "severely unaffordable," said the 7th Annual International Housing Affordability Survey by US-based Demographia.

Meanwhile, prices are set to soar more than 30 percent in the next two years, UBS warned.

The Demographia survey tracked home prices and household income in 325 urban markets in Australia, Canada, Hong Kong, Ireland, New Zealand, Britain and the United States.

The median home price in Hong Kong was HK$2.58 million in the third quarter of 2010 - 11.4 times the median household annual income of HK$225,400. Sydney followed with a multiple of 9.6 and Vancouver with 9.

But local experts dispute the findings. "The survey ignores the fact that there is affordable housing in Hong Kong, like public housing and the Home Ownership Scheme," said Eddie Hui Chi-man, a professor at the Hong Kong Polytechnic University.

Hui said it would be more fair to compare affordability by analyzing exactly what proportion of household income is spent on housing.

A resident of Vancouver said the survey does not take taxation levels into consideration. "The disposable income is limited by heavy tax in Canada, making houses less affordable than in Hong Kong," said Brian Wong, who moved back to Vancouver from Hong Kong last year.

"The price for my apartment almost doubled to C$560,000 (HK$4.38 million) in the past two years, but salaries have not kept pace," added Wong, who makes C$52,000 a year before tax.

Home prices in Hong Kong soared 20 percent last year, backed by prolonged low interest rates, improving economy and more mainland buyers.

Local home prices, meanwhile, are expected to surge 33 percent in two years while inflation may peak at 7 percent this year, predicts Eric Wong Chun-ya at UBS. Rents will also increase 15 percent over the same period.

One of the major drivers for local home prices, Wong said, is surging inflation due to depreciation of the Hong Kong dollar. Inflation this year may go up to 7 percent, leading to a real interest rate of below minus 6 percent, which will drive demand in the property market and push up prices

THE MAGIC SALES OF BLOCK 9 FLOOR 67 APP A + B + C

As I am more and more watching some market activities on the 2nd hand property transactions something very interesting came to my attention. The complex I am living in has 9 blocks (actually is only 8 as number 4 is omitted). This complex is under very heavy speculation since 1 or 2 years.
A 'magic sale' has just happened in Block 9 on 3 flats in the floor 67 appartments A + B + C:
- all 3 of them bought on the same day 07.11.03
- A has 1,015 sqf sold on 10.01.11 for 6.60 Mio (bought for 2.90 Mio)
- B has 1.169 sqf sold on 10.01.11 for 7.60 Mio (bought for 4.16 Mio)
- C has 1,169 sqf sold on 10.01.11 for 7.06 Mio (bought for 4.37 Mio)
Wow ! The guy or maybe better the company who have owned this 3
appartements just made 10 Mio out of the sale for the 3 - as it looks very clearly this is
all same seller / owner.
I can see the slimy grinning agent already when he sees me the next time, telling me: "See the prices are still rising"......................
Okay - maybe I am so wrong - this A B + C flats all have golden toilet & no cockroaches - but they do not have balcony & they are COLD. Anyhow somebody wants to know which complex this is please feel free to ask !

Now they are protesting against the new measures.....

It is not even 2 weeks ago the Government introduced new measures to cool down the completely overheated property market. See the posts below.
So almost immediately the "property-sharks" are biting back.
Last week one spokesman from one main developer said "this new measures
would mainly hurt the end-user" - means people who want to buy a property
to use for themselves (what actually still should be the main reason to buy some
appartment - or ?). Because if they buy after the day of the new measures have
come into force and then they suddenly loose their job or have to sell the
appartment because of some financial problems. This point is not really correct:
If you buy today with the purpose to use it for your own living this is something
people are planning for a long time and not in a short term thinking. So if your job
situation or financial situation is weak you will not consider to buy anyhow. This point
maybe is true for only a very small percentage of buyers - so NO POINT AT ALL !
But as the news is telling transactions are very little after the measures have been
introduced - because all the gamblers (speculators) are scared away from buying -
THIS IS VERY CLEAR.
And now the agencies start crying & weeping: If the Government does not revert that
new measures 1,000 of agencies maybe closed & 10,000 of agents will loose their jobs !
GOOD ! Another logical step to cool down the market. Alone in my street are 8 agencies
in a distance of 200 meters - they are all offering the same appartments !
They want the Government to impose a profit-tax. Not a really good idea as people have
many possibilities to avoid this.
So now all this guys (price pushers) who were actually one of the reason that
the prices are "sky-high" are in big trouble, because their commission income for finished
transactions for the next weeks, months will decrease significantly. As they get a lousy basis
pay here we have another reason for this property prices - in past months (1 - 2 years) they
were trying everything to artificially push up prices into completely unreasonable heights.
The higher they sell the more they earn - so why keep the prices low ? They just told sellers to increase the initial asking price - this is snowball - system. If one is starting to do so the others will follow suit soon.
They want to held a protest march now on the coming weekend in Central !

Some new measurements to cool the property market

Please read the 2 articles from SCMP of today. I am not sure if this will significantly help - but lets see. There must be more restrictions for mainland buyers in my opinion for example set up a quota for how many properties a private person / or company is allowed to buy. Check of the origin of the money which is used to buy the property. Also in general more transparency is needed like a buyers register (which will not collide w any "privacy laws".) Please read the 2 articles - just click on them for big size reading.

HK PROPERTY - HOW TO PUSH UP THE PRICE

OKAY ! This is just blank theory - but maybe there is some truth behind. I am living in a nice estate in the NT - 2 phases built - the first one around 7 years ago finished. So today my wife tells me...hey in Block 9 even without a balcony one flat was sold for HKD 6.6 Mio.....My first reaction was ..."This is fake or scam"...So later I checked the transaction records:
Flat 38C sold for HKD 6.6 Mio in middle of October 2010 (almost 95% profit compared with 1st transaction) - then after more checking: Same Block flat 48C sold for 6.26 Mio in July 2010 (almost 85% profit compared with 1st transaction). My guess it is / was the same owner - superstitious number ending with 8 - almost same 1st transaction date & almost same 2nd transaction for each almost double the price.
So if I am wrong then this is pure speculation:
1) You have a company interested in speculation in property
2) You buy several appartments in the same estate
3) You mostly keep them empty / unoccupied
4) You have a second company
5) At the right moment your company 1 sells the property to your company 2 for an extremly high price compared with the 1st transaction (75% -90% profit)
6) Is this a good or a bad deal ?
7) It is not really a good deal at all - because you are only moving the money from the left side of your pocket to the right side of your pocket
8) But it is a good deal if your companies are involved in property dealing - means you are one of the HK property agents and you are using "con-man" companies or whatever possible abstruse company constellations to handle this kind of transactions.
9) Then it is a very good deal - because your transaction will be listed in one of the pages of a special section in APPLE DAILY or other property gazettes and everybody will say "oh wow the prices are still going up"
10) Multiply this kind of idea / system by 100 - you are already manipulating the market in a decent way.
So why not introducing a scheme to have a register about who is selling & buying:
1) For private sellers / buyers just issue the first numbers of their ID Card
2) For company sellers / buyers issue the first part of the company name or the first 5 digits of their business registration number
This could help to bring some transperancy into the transactions.
Update 17.11.10: Surely if the toilet bowl & seat & water taps are pure gold then the price for this 38C & 48C is maybe reasonable (there are two toilets in each flat & and a lot of water taps)

HONG KONG REAL ESTATE OUT OF CONTROL (via Spike)

Please read below - it is originally from Spike from here http://hongkietown.com/ - Thank you for being so kind to just let me copy it as is:
quote
How can a poor man stand such times and live? That’s the title of a song written in 1929 during the American depression by Blind Alfred Reed, who accompanied himself on the violin according to Wikipedia. Presumably he couldn’t afford to hire any back-up musicians. Bruce Springsteen sang it in 2006 though he rewrote most of the lyrics. Ry Cooder recorded the song in 1970 and in this video on Youtube (I think it’s from the 70′s) he is accompanied by the always incredible Flaco Jimenez.

Of course in Hong Kong, it’s not just poor people, even the middle class is being squeezed far beyond the bounds of normalcy or decency.

From today’s SCMP:

Property prices in Hong Kong have risen by more than 45 per cent from the trough to which they sank after the onset of the global financial crisis in 2008, research by the Hong Kong Monetary Authority shows.

The recovery in the luxury residential market has been particularly strong and average prices in the sector are now 14 per cent higher than their previous historic peak, reached in the third quarter of 1997.

Prices in the mass residential market are only 10 per cent down on the peak levels reached before the Asian financial crisis of 1997-1998 triggered a sharp slump in the market.

But homebuyers are not as heavily indebted as they previously were, with the current mortgage repayment-to-income ratio at around 40 per cent, compared with more than 100 per cent in 1997. Mortgage rates are also less than 2.5 per cent, against more than 10 per cent in 1997.

The average loan size is about HK$2.5 million with an average contractual period of 23 years, both at record highs for the past 10 years.

Hong Kong has surpassed New York, Paris and Tokyo to become one of the most expensive cities for buying a flat, according to a report from the Global Property Guide.

The report says Hong Kong is now the third most-expensive city for buying a 1,291 sq ft apartment in the city centre, with Monaco the world’s most expensive and London in second place.

“Demand for housing in Hong Kong is no longer limited to local people, but also comes from the mainland,” said Alva To Yu-hung, the head of property consultant DTZ.

and from another article in SCMP today:

“We are not surprised by these [property price] figures,” Buggle Lau, chief analyst at Hong Kong property broker Midland Holdings, told reporters.

“In recent years, Hong Kong has seen a surge in mainland Chinese buying luxury homes… This has created a situation where demand for luxury homes exceeds supply.”

Pro-government lawmaker Raymond Ho Chung-tai called on the government to do more to help the city’s less well off during a debate on Wednesday.

“Residential flat prices have become a major concern for Hong Kong people,” he said.

“The middle and lower class are finding it more difficult to afford flats amid ever-increasing property prices.”

“The government should consider resuming ‘Home Ownership Scheme’ to meet the demand for flats and increase land auctions to increase land supply.”

Opposition lawmaker Frederick Fung Kin-kee said: “For private developers, of course it’s the more money, the better… They are not willing to help stabilise the market,” said another,

“Since there is no regulation, it is not possible to control their greediness and shortsightedness.”

None of this is a surprise, really. Not even the fact that someone’s English name is Buggle.

And a third article in the SCMP. Maybe this would attract someone’s attention in government – if anyone actually paid attention to the SCMP.

… lawmaker Wong Kwok-hing of the Federation of Trade Unions said on Wednesday the scheme not cool down property prices.

“This policy would not control property developers [driving up prices]. People feel depressed and angry about it,” he told Legco.

Wong also criticised the government for giving no details on several other policies, including retirement allowances for the elderly; policies affecting standard working hours, and new laws to regulate private columbaria.

Hong Kong Association for Democracy and People’s Livelihood lawmaker Frederick Fung Kin-kee also attacked the new housing policies.

He said the government had made available at least 5,000 unsold flats annually under the old Home Ownership Scheme (HOS). But the supply of flats under the new “My Home Purchase Scheme” would only produce 5,000 units by 2014.

“The housing policy outlined in the policy address would not help stabilise the property market,” he predicted.

Fung called on the government to resume building HOS flats.

In other developments, the pan-democrats said they would move five amendments to the motion of thanks for the policy address. The Democratic Party’s three lawmakers plan to move three amendments.

These include a call for the resumption of the HOS flat scheme, abolition of appointed District Council seats by next year, and a motion expressing their disappointment at government’s policies to tackle poverty.

Fred Li Wah-ming, a leading member of the Democratic Party, said his members probably would not support the motion of thanks if their amendments were not passed.

But lawmaker Ip Kwok- him of the Democratic Alliance for the Betterment and Progress of Hong Kong (DAB) said his members would vote against the Democratic Party’s motion of amendments to the policy address.

The Economist surveys the global housing market and has decided that Hong Kong real estate is over valued by 58%. They rate Australia as the most over-valued, Hong Kong only comes in at #2. Lord Donald “Boom Boom” Tsang needs to try harder.

There once was a time when everything was cheap, But now prices nearly puts a man to sleep. When we pay our grocery bill, We just feel like making our will — I remember when dry goods were cheap as dirt, We could take two bits and buy a dandy shirt. Now we pay three bucks or more, Maybe get a shirt that another man wore — Tell me how can a poor man stand such times and live? Well, I used to trade with a man by the name of Gray, Flour was fifty cents for a twenty-four pound bag. Now it’s a dollar and a half beside, Just like a-skinning off a flea for the hide — Tell me how can a poor man stand such times and live? Oh, the schools we have today ain’t worth a cent, But they see to it that every child is sent. If we don’t send everyday, We have a heavy fine to pay — Tell me how can a poor man stand such times and live? Prohibition’s good if ’tis conducted right, There’s no sense in shooting a man ’til he shows flight. Officers kill without a cause, They complain about funny laws — Tell me how can a poor man stand such times and live? Most all preachers preach for gold and not for souls, That’s what keeps a poor man always in a hole. We can hardly get our breath, Taxed and schooled and preached to death — Tell me how can a poor man stand such times and live? Oh, it’s time for every man to be awake, We pay fifty cents a pound when we ask for steak. When we get our package home, A little wad of paper with gristle and a bone — Tell me how can a poor man stand such times and live? Well, the doctor comes around with a face all bright, And he says in a little while you’ll be all right. All he gives is a humbug pill, A dose of dope and a great big bill — Tell me how can a poor man stand such times and live?
unquote

Correction regarding the capital Investment Entrant Scheme

Sorry for overseeing this: In the today policy address the so-called "Capital Investment Entrant Scheme" was changed (at least temporarily) with effect from tomorrow - means mainland buyers with foreign passport cannot buy anymore property under this scheme - here the full text from the policy address:
quote
Review of the Capital Investment Entrant Scheme
34. The Government has reviewed the Capital Investment Entrant Scheme, and noted an upward trend in real estate investment, which accounted for 42% of the total investment under the scheme for the first nine months of this year. Despite the fact that real estate investments under the scheme in recent years have only represented about 1% of the total market turnover, the Government, in view of public concern, has decided to temporarily remove real estate from the investment asset classes under the scheme with effect from 14 October. The Security Bureau will announce the implementation details and other changes to the scheme later.
unquote

THIS IS GOOD NEWS - AT LEAST SOME MEASURE TO COOL DOWN A LITTLE BIT.
Implementation details once available will be issued here - this issue is also some kind of "Visa issue" because under this scheme you will get a HK ID card automatically.

HONG KONG PROPERTY PRICES

Here 1 cutting from yesterdays SCMP readers letter. Mr. Yiu is exactly getting the point - I have experienced exactly the same again and again. The market is too much driven by "poker faced" agents. In the todays policy address of our CEO not any idea about how to stop that. One should initiate a interest group to actively fight against this kind of "sales - tactics". Also once again another proposal from my side mainland buyers should be put on some quota - even if they are holding this so-called "capital investment entrant scheme"(please see correction in next post). Also there should be the obligation to proof the origin of the money if property is paid in cash by mainlanders. The other article is about flats in Tokyo - so now HK is even more expensive ! Please click on the picture for reading: