Posts Tagged ‘homes’

China’s “helicopter money” to support homes and apartments expected to keep social stability

October 10, 2018

China has turned half a trillion dollars of central bank money into bricks and mortar, and there’s more to come.

That transformation can be best seen in Heze, a ‘small’ city of about nine million in the province of Shandong. There, local authorities have ripped down more than a quarter of a million older houses since 2015, some of them traditional-style homes with calligraphy emblazoned above wooden doors, in order to build new ones financed largely by money printed by the People’s Bank of China.

A shantytown awaiting redevelopment stands in front of apartment blocks in Heze. Photographer: Yinan Zhao/Bloomberg

As part of its efforts to support a slowing economy, the government said this week that it is speeding up the construction of 15 million new homes to replace substandard dwellings nationwide. That program has so far pumped 3.2 trillion yuan ($463 billion) into the economy, by replacing older buildings with shiny new tower blocks.

With Donald Trump’s trade war battering the economic outlook, the government is pulling multiple levers to lessen the impact on Chinese citizens, as well as softening previous campaigns to reduce debt risk and clean up the financial sector.

Now, by accelerating the so-called shanty-town redevelopment program while curbing the cash handouts that have accompanied it, the government is trying to boost stimulus while avoiding a bursting of property bubbles nationwide.

“Shanty-town redevelopment is important as this is a key part of domestic demand which is directly controlled by the government,” analysts led by Song Yu, chief China economist at Beijing Gao Hua Securities Co., Goldman Sachs Group Inc.’s mainland joint-venture partner, wrote in a note. “There have been a lot of market concerns whether the government would scale back the amount of related investment.”

Read More on China’s Economic Stimulus Efforts

It’s hard to over-estimate the transforming power of the program, at least in the places where it has been implemented. It works by using newly-created PBOC yuan to give occupants of old communal housing brand-new apartments, cash, or both.

The PBOC prints money, lends it to the China Development Bank, the world’s biggest policy bank, via the Pledged Supplementary Lending Facility, which then lends to local government financing vehicles in mostly small cities. Local governments aim to repay the loans via revenue from land sales or redevelopment.

Heze has demolished more older homes than any other small city in China. One of the city’s few other claims to fame is that it is the home town of Peng Liyuan, President Xi Jinping’s wife and China’s first lady. There, towers are still rising from the dusty streets and construction is in full swing.

Li Ai’lian at home in Heze. Photographer: Yinan Zhao/Bloomberg

Li Ai’lian is among those who received windfall gains. Last year she was compensated for her old self-built home with three apartments and 300,000 yuan in cash.

“This saved me 10 years of hard work,” says Li. “Where we lived before there were muddy roads outside with chickens and ducks running around. It was so dirty.”

While the program has improved the lives of thousands of people like Li and helped boost consumption and growth, it’s also fueled a build up of debt in many small cities with weak finances. In Heze, downtown house prices have more than doubled to 8,000 yuan per square meter within about four years, according to Fan Guifang, a saleswoman at property agent Hua Yang Fang Chan in the city.

That’s a key reason why Monday’s order to accelerate construction was accompanied by instructions to stop cash payments for resettlement in cities where house prices have surged, and where inventories of empty homes have fallen.

Image result for Yinan Zhao, photos, housing, china

Potential homebuyers visit a housing expo in Zhengzhou, Henan province. China will stabilize property market with tailored, market-based policies

A jump in cash settlements to 56 percent of China Development Bank’s 543 billion yuan of shantytown loans in 2016, from 20 percent two years earlier, was widely seen to have fueled home prices in small cities. Last year the policy lender began lowering the ratio to curb risks, it said in its annual report.

Managing home prices is not an abstract matter for Xi Jinping’s government; it’s a matter of social stability. Home buyers angry that apartments are being sold for much less than they paid swamped property developers’ marketing offices across China over the Golden Week holiday, demanding their money back.

Angry Mobs Show All’s Not Well in China’s Property Sector

China economist Lu Ting at Nomura International Ltd. in Hong Kong likens the cash settlement part of the plan to “helicopter money,” a term coined by Milton Friedman to explain how central banks could drop newly printed money from a helicopter to boost prices.

In the decade after the global financial crisis, economists debated whether central banks like the Federal Reserve or the European Central Bank should actually take such a step in order to boost flagging demand.

The program can’t continue indefinitely though, and an eventual tapering is a “big risk” that may trigger growth and financial instability, Lu says. Markets should be aware that money for the program may be significantly cut for some cities in the near future, Lu wrote in a note.

Overall, concerns about the outlook for the real estate sector have weighed on the share prices of developers like Country Garden Holdings Co. and China Vanke Co.

Societe Generale SA says how China adjusts the policy will be key to the outlook for the housing market, which UBS AG estimates contributes almost a quarter of final demand in the economy. The single most important factor for the outlook is when the property market reaches an inflection point, which will be strongly influenced by housing starts in small cities, says Larry Hu, a Hong Kong-based economist at Macquarie Securities Ltd.

China plans to construct 15 million homes under the program over three years from January this year with work already underway on 5.34 million units. Yu at Beijing Gao Hua says the government has left room “for a potential tweak higher in the target next year.”

A shantytown awaiting redevelopment in Heze.  Photographer: Yinan Zhao/Bloomberg

Life’s Challenges

Heze’s forging ahead. When Nissan car salesman Cao Zhihui was posted there a year ago, it looked like it was being reconstructed after an earthquake, he said. All across the city older neighborhoods of traditional housing were flattened or being demolished while in other parts brand new apartment blocks and other infrastructure were under construction.

Heze plans to demolish another 127,000 houses this year and 122,000 more by 2020, says its local government. It received loans under the program totaling 36 billion yuan in the past two years, almost matching its fiscal revenue of 37.1 billion yuan.

Xu Li, 33, is one of the beneficiaries. Her family received two three-bedroom apartments about a year ago in return for an old house. Though she says half of her high-school friends have left Heze for cities with better opportunities, she beams with happiness.

“Getting a house is one of life’s most difficult things,” she said, while playing with her one-year-old daughter in her new apartment complex’s play area. “In one swoop all of life’s major challenges have been solved.”


 Indonesia plans to sell “catastrophe bonds” to fund disaster recovery

October 4, 2018

Indonesia plans to launch a new strategy to fund disaster recovery, which could include selling”catastrophe bonds”, a government official said on Thursday (Oct 4), as the country faced up to the devastation from a huge earthquake and a tsunami.

The city of Palu and surrounding districts on the island of Sulawesi were rocked by the 7.5 magnitude earthquake last week, killing more than 1,400 people and destroying thousands of homes, as well as damaging bridges and other infrastructure.

Under the new strategy, starting next year, the government would begin to insure state assets against a major disaster.

Under the new strategy, starting next year, the government would begin to insure state assets against a major disaster.PHOTO: REUTERS

Mr Suahasil Nazara, who heads the fiscal policy office at the Finance Ministry, said the strategy would be launched when Indonesia hosts the the annual meetings of the International Monetary Fund (IMF) and the World Bank in Bali later this month.

“A disaster could come anytime, no one can predict, but whenever it occurs, we must have the capacity to address it,” Mr Suahasil told reporters on the sidelines of a book launch by the IMF and Bank Indonesia.

The National Disaster Mitigation Agency estimated a series of earlier quakes that hit the resort island of Lombok in July and August had caused damages worth 12 trillion rupiah (S$1.09 billion) and killed nearly 500 people.

Agency spokesman Sutopo Purwo Nugroho estimated the losses would be far greater in Sulawesi.

“The situation in Palu and Donggala makes us think harder on how to respond,” he said, referring to the capital of Central Sulawesi Province and a surrounding district.

Mr Suahasil said under the new strategy, starting next year, the government would begin to insure state assets against a major disaster.

The central government woulds then create a disaster risk financing instrument, which local governments can draw upon if their budgets are wiped out because of a natural catastrophe, he said.

The instrument would be managed in “an insurance-type of process”, Mr Suahasil said, adding that the central government may reinsure the risks with either global or local insurance players.

The government could also sell “catastrophe bonds”, which Mr Suahasil described as a type of debt where the issuer pays interest, but only gets the capital in the event of a disaster.

However, the strategy may require changes in the regulatory framework, including a revision to the Treasury Law, which currently only allows the government to issue bonds to finance its fiscal deficit.

Mr Suahasil said the government plans to change some rules to allow the new strategy.


France Wants Compromise on U.N. Yemen Inquiry as Saudi Pressure Mounts

September 28, 2017

PARIS/GENEVA — France is pushing for a compromise over a proposed resolution by the U.N. human rights body that would establish an international inquiry into atrocities in Yemen despite repeated opposition from Saudi Arabia, officials said on Thursday.

U.N. human rights chief Zeid Ra’ad al-Hussein has asked for three years running that the 47 countries in the U.N. Human Rights Council set up an independent investigation into Yemen’s war, which has killed thousands of people, destroyed the economy and pushed millions to the brink of famine.

Despite his pleas, member states have twice endorsed a Saudi plan to let Yemen investigate by itself. Rights groups fear Saudi pressure is leading France, Britain and the United States to water down the latest effort, due to be voted on Friday.

Image may contain: sky and outdoor

A man checks damage in a residential area one day after it was hit by a Saudi-led airstrike in Yemen. Reuters FILE PHOTO

“We are working in particular to narrow positions on the international dimension of the investigation mechanism on the violation of human rights committed in Yemen,” French foreign ministry spokeswoman Agnes Romatet-Espagne told reporters, when asked if Paris would support a Dutch-Canadian resolution calling for an international and independent investigation.

Saudi Arabia and its allies have been bombing the Iran-aligned Houthi movement in Yemen since the Houthis seized much of the country’s north in 2015.

The U.N. human rights office has said Saudi-led air strikes have caused most civilian casualties. Earlier this month, however, a panel set up by the coalition to investigate civilian casualties found a series of deadly air strikes were largely justified, citing the presence of armed militiamen at the homes, schools and clinics that were targeted.

Diplomats said negotiations continued on Thursday to try to strike a consensus between the Dutch-led resolution and a rival Arab group resolution. France is not a voting member but has significant sway on the Geneva-based council.

The French statement appeared to echo Britain and the United States, which want to see consensus around a single resolution.

The second resolution makes no mention of an international investigation, but requests that the U.N. dispatch a team of three experts to “carry out a comprehensive assessment into all alleged violations” and exchange information with the national commission of enquiry.

“We believe that there is room to satisfy everybody,” said a French diplomatic source, denying that Paris was seeking to weaken the text. Two diplomatic sources said the Dutch were under great pressure to back down.


In a letter seen by one of the diplomats, Saudi Arabia – the world’s biggest oil exporter – has warned some states of possible consequences should they support the Dutch-Canadian resolution.

The Saudi ambassador in Geneva declined to comment on the negotiations. Saudi Arabia, which leads an international coalition battling the Iran-aligned Houthi movement in Yemen, has said the time is not right for an international inquiry.

The new French administration has drawn criticism over its stance in light of a ringing appeal by President Emmanuel Macron to defend human rights during his inaugural speech at the United Nations General Assembly on Sept. 20.

Six major international groups, including Amnesty International, have published columns in the French press over the last week calling on Macron to do more on Yemen.

“By refraining from supporting efforts to advance justice in Yemen, President Macron would betray his own pledge to uphold human rights values and place lucrative arms deals with Saudi Arabia above the shattered lives of ordinary Yemenis who have endured years of war crimes, cholera and near famine,” Louis Charbonneau, United Nations-based director at Human Rights Watch, said by phone.

“It’s not too late…to finally support an international investigation on Yemen and show Macron’s commitment to human rights is more than mere words.”

(Additional reporting by Tom Miles; editing by Mark Heinrich)

As Texans Return to Flood-Hit Homes, Many Say ‘Our House Is History’

September 3, 2017

HOUSTON — As flood waters recede from Hurricane Harvey, thousands are set to return to their homes on Sunday to survey damage from unprecedented flooding that devastated densely populated areas of Texas, as worries mount about health risks.

Harvey, which came ashore on Aug. 25 as the most powerful hurricane to hit Texas in 50 years, is expected to be one of the costliest natural disasters in U.S. history, having displaced more than 1 million people and leaving wreckage in an area stretching for more than 300 miles (480 kms) which officials said would take years to repair.

Thirteen Superfund sites, heavily contaminated former industrial zones, in Texas were flooded or damaged by Hurricane Harvey, but the full impact on surrounding areas was not immediately clear, the U.S. Environmental Protection Agency said on Saturday.

Image result for debris from homes piles up, after harvey, houston, photos

The announcement came amid rising concern about the health risks posed by Harvey’s record floodwaters, which contain a toxic soup of chemicals, oil and bacteria from Houston’s notoriously leaky sewer system.

The city of Houston ordered a mandatory evacuation on Sunday for about 4,600 residences in the western sector, where several hundred people have not left their homes and flooding is expected to last for another two weeks.

“Put your own personal safety above your property,” Mayor Sylvester Turner said, adding residents should consider the safety of first responders who would have to handle any emergencies.

The evacuations, put in force by shutting off of power, were set to take effect at 7 a.m. CDT.

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The damage from the storm is also posing an economic and humanitarian challenge for U.S. President Donald Trump, who visited Houston on Saturday and met some of the thousands of people in evacuation shelters and rescue workers who have helped shuttle survivors to safety.

The visit gave Trump an opportunity to show an empathetic side, after some criticized him for staying clear of the disaster zone during a Texas visit on Tuesday. Trump said he did not want to hamper rescue efforts.

Late Saturday night, Trump tweeted “Just got back to the White House from the Great States of Texas and Louisiana, where things are going well. Such cooperation & coordination!”

The Trump administration on Friday asked Congress for a $7.85 billion appropriation for response and initial recovery efforts. Texas Governor Greg Abbott, who accompanied the Trumps, has said his state may need more than $125 billion.


Image result for debris from homes piles up, after harvey, houston, photos

For many in the Houston metropolitan area, which has an economy as large as Argentina’s, losses to individual families were cataclysmic.

In a neighborhood in east Houston, streets were lined with 8-foot (2.4 meter) piles of soggy debris, including mattresses, carpets and other belongings ripped out of homes.

Adrian Rodriguez returned on Saturday to his flood-hit home there where he lives with his wife and three young boys.

“I lost everything. All my children’s pictures of them growing up. Their birthday pictures. Vacation pictures. Their school projects of what they wanted to be when they grow up,” he said.

“There is furniture on the sidewalk that I’m still paying for,” he said. “Everything in the house is history.”

Many areas were still battling floodwaters from swollen rivers that were expected to last for a week or more. In Beaumont, about 85 miles (140 km) east, officials were trying to repair a flood-damaged pumping station that caused the city of about 120,000 people to lose drinking water for days.

Image result for debris from homes piles up, after harvey, houston, photos

As of Saturday morning, nearly 200,000 homes have suffered flood damage and about 12,600 were destroyed, according to the Texas Department of Public Safety.

The storm shut about a fourth of U.S. refinery capacity, much of which is clustered along the Gulf Coast, and caused gasoline prices to spike to a two-year high ahead of the long Labor Day holiday weekend.

Meanwhile a new storm, Irma, strengthened on Friday into a Category 3 hurricane on the five-step Saffir-Simpson scale.

It remained more than 1,000 miles from the Leeward Islands, where residents were advised to monitor its progress. The National Hurricane Center said in an advisory late Saturday night it was still much too early to determine what direct impact it might have on the Bahamas and the continental United States.

(Additional reporting by Richard Valdmanis, Ruthy Munoz, Ernest Scheyder, Daniel Trotta and Catherine Ngai and Emily Flitter in Houston, Steve Holland in Washington and Jon Herskovitz in Austin, Texas; Writing by Jon Herskovitz, editing by Chris Michaud)

Image result for debris from homes piles up, after harvey, houston, photos

Vice President Mike Pence helps with clean up.

Why can’t Indians gain possession of the homes they own?

April 6, 2017

Corruption, tax dodging and land disputes are big problems hampering India’s property market.

  • 6 April 2017
    BBC News
  • From the sectionBusiness

Will Singapore Be Replaced By New Chinese City in Malaysia?

November 27, 2016


Ongoing construction of the Country Garden Danga Bay project in Johor Malaysia. Chinese home buyers are betting that the city of Johor Bahru, bordering Singapore, will eventually become the next Shenzhen.

The landscaped lawns and flowering shrubs of Country Garden Holdings Co’s huge property showroom in southern Malaysia end abruptly at a small wire fence. Beyond, a desert of dirt stretches into the distance, filled with cranes and piling towers that the Chinese developer is using to build a $100bn city in the sea.

While Chinese home buyers have sent prices soaring from Vancouver to Sydney, in this corner of Southeast Asia it’s China’s developers that are swamping the market, pushing prices lower with a glut of hundreds of thousands of new homes. They’re betting that the city of Johor Bahru, bordering Singapore, will eventually become the next Shenzhen.
“These Chinese players build by the thousands at one go, and they scare the hell out of everybody,” said Siva Shanker, head of investments at Axis-REIT Managers and a former president of the Malaysian Institute of Estate Agents. “God only knows who is going to buy all these units, and when it’s completed, the bigger question is, who is going to stay in them?”
The Chinese companies have come to Malaysia as growth in many of their home cities is slowing, forcing some of the world’s biggest builders to look abroad to keep erecting the giant residential complexes that sprouted across China during the boom years. They found a prime spot in this special economic zone, three times the size of Singapore, on the southern tip of the Asian mainland.
The scale of the projects is dizzying. Country Garden’s Forest City, on four artificial islands, will house 700,000 people on an area four times the size of New York’s Central Park. It will have office towers, parks, hotels, shopping malls and an international school, all draped with greenery. Construction began in February and about 8,000 apartments have been sold, the company said.
It’s the biggest of about 60 projects in the Iskandar Malaysia zone around Johor Bahru, known as JB, that could add more than half-a-million homes. The influx has contributed to a drop of almost one-third in the value of residential sales in the state last year, with some developers offering discounts of 20% or more. Average resale prices per square foot for high-rise flats in JB fell 10% last year, according to property consultant CH Williams Talhar & Wong.
Country Garden, which has partnered with the investment arm of Johor state, launched another waterfront project down the coast in 2013 called Danga Bay, where it has sold all 9,539 apartments. China state-owned Greenland Group is building office towers, apartments and shops on 128 acres in Tebrau, about 20 minutes from the city centre. Guangzhou R&F Properties Co has begun construction on the first phase of Princess Cove, with about 3,000 homes.
Country Garden said in an e-mail it was “optimistic on the outlook of Forest City” because of the region’s growing economy and location next to Singapore. R&F didn’t respond to questions about the effects of so many new units and Greenland declined to comment.
“The Chinese are attracted by lower prices and the proximity to Singapore,” said Alice Tan, Singapore-based head of consultancy and research at real-estate brokers Knight Frank. “It remains to be seen if the upcoming supply of homes can be absorbed in the next five years.”
The influx of Chinese competition has affected local developers like UEM Sunrise, Sunway and SP Setia, who have been building projects around JB for years as part of a government plan to promote the area. First-half profit slumped 58% at UEM, the largest landowner in JB.
A decade ago, Malaysia decided to leverage Singapore’s success by building the Iskandar zone across the causeway that connects the two countries. It was modelled on Shenzhen, the neighbour of Hong Kong that grew from a fishing village to a city of 10mn people in three decades. Malaysian sovereign fund Khazanah Nasional Bhd. unveiled a 20-year plan in 2006 that required a total investment of 383bn ringgit ($87bn).
Singapore’s high costs and property prices encouraged some companies to relocate to Iskandar, while JB’s shopping malls and amusement parks have become a favourite for day-tripping Singaporeans.
In the old city centre, young Malaysians hang out in cafes and ice cream parlours on hipster street Jalan Dhoby, where the inflow of new money is refurbishing the colonial-era shophouses.
Outside the city, swathes of palm-oil plantations separate isolated gated developments like Horizon Hills, a 1,200-acre township with an 18-hole golf course.
“The Chinese developers see this as an opportunity. A lot of them say Iskandar is just like Shenzhen was 10 years ago,” said Jonathan Lo, manager of valuations at CH Williams Talhar & Wong, a property broker based in Johor Bahru. “Overseas investors coming to Malaysia is a new phenomenon so it’s hard to predict.”
Construction soon outpaced demand. To sell the hundreds of new units being built every month, some companies took to flying in planeloads of potential buyers from China, prompting low-cost carrier AirAsia to start direct flights in May connecting JB with the southern Chinese city of Guangzhou.
On the first such flight, 150 of the 180 seats were taken by a subsidized tour group organised by Country Garden. Almost half of them ended up buying a residence, the developer said in an e-mail. Buses disgorging Chinese tourists at Forest City in November were met by dozens of sales agents, with the women dressed in traditional Sarong Kebaya outfits similar to those worn by Singapore Airlines stewardesses.
The visitors filed into a vast sales gallery where agents explained the enormity of the project using a replica of the finished town, with model buildings as tall as people. They viewed show flats with marble floors and golden-trimmed furniture, dined on a buffet spread and were encouraged to sign on the spot. A two-bedroom apartment cost as little as 1.25mn yuan ($181,400), about one-fifth of the price of a similar-sized private apartment in central Singapore.
But JB is not Shenzhen. The billions poured into the economic zone in southern Guangdong in the 1980s and 1990s by Hong Kong and Taiwanese firms was soon dwarfed by Chinese investment as factories sprang up all along China’s coast.
In Malaysia, investment growth is slowing, slipping to 2% year-on-year in the third quarter, from more than 6% in the previous quarter. The value of residential sales in Malaysia fell almost 11% last year, while in Johor the drop was 32%, according to government data.
“I am very concerned because the market is joined at the hip, if Johor goes down, the rest of Malaysia would follow,” said Shanker, at Axis-REIT Managers, who estimates that about half the units in Iskandar may remain empty. “If the developers stop building today, I think it would take 10 years for the condos to fill up the current supply. But they won’t stop.”
Developers have a pipeline of more than 350,000 private homes planned or under construction in Johor state, according to data from Malaysia’s National Property Information Centre. That’s more than all the privately built homes in Singapore. Forest City could add another 160,000 over its 30-year construction period, according to Bloomberg estimates, based on the projected population.
“Land is plentiful and cheap,” said Alan Cheong, senior director of research & consultancy at Savills Singapore. “But buyers don’t understand how real estate values play out when there is no shortage of land.”
The developers haven’t been helped by government measures designed to prevent overseas investors pushing up prices. In 2014, Malaysia doubled the minimum price of homes that foreigners can buy to 1mn ringgit, and raised capital gains tax to as much as 30% for most properties resold by foreigners within five years.
The stream of new developments has scared away some investors, pushing developers to concentrate more on finding families who will live in the apartments, said Lo at CH Williams. Profit margins have fallen to around 20%, from 30% when land was cheap a few years ago, according to his firm.
Singapore billionaire Peter Lim’s Rowsley Ltd said last year it will no longer build homes in Iskandar and will instead turn its Vantage Bay site into a healthcare and wellness centre.
“The Chinese players have deep financial resources and are building residential projects ahead of demand,” Ho Kiam Kheong, managing director of real estate at Rowsley said in an interview. “If we do residential in Iskandar, we would be only a drop in the ocean. We can’t compete with them on such a large scale.”
UEM Group, the biggest landowner in Iskandar, is selling plots to manufacturers to boost economic activity in the area.
“Industries are the queen bee,” creating jobs and wealth for local residents, said Chief Executive Officer Izzaddin Idris. “That will bring a demand for the houses we are building.”
US-based chocolate maker Hershey Co is among those building a plant in Iskandar, joining tenants such as amusement park Legoland Malaysia and Pinewood Iskandar Malaysia Studios-a franchise of the UK-based movie studio.
Meanwhile, sales reps sell a Utopian dream-a city of the future with smart, leafy buildings and offices full of happy, rich residents.
“It will take a while for all the parts to fall into place: infrastructure, manufacturing, education, healthcare and growth in population,” said Ho at Rowsley.
“But I have no doubt it will happen eventually.”

Hong Kong property sales plummet to lowest in quarter century and worst is on the way

February 2, 2016

Slump in one of the world’s priciest markets hits home

By Peggy Sito
South China Morning Post

Property sales in Hong Kong plunged to 3,123, the lowest January figure recorded by the government since 1991 and the worst is yet to come, property agents said.

The transaction volume represented a 41 per cent decline month-on-month or a 62 per cent dive year-on-year as developers slow down on new launches in the wake of bearish sentiment and ahead of the Chinese New Year holidays.

Total transaction value fell 43.5 per cent month-on-month to HK$20.69 billion, the lowest amount hit since February 2009.

Midland Realty chief analyst Buggle Lau expected total sales will drop further next month to below 3,000 deals.

READ MORE: Hong Kong sees spurt in negative-equity home owners as property prices tumble

The market is plagued by sour sentiment in the wake of a rash of negative news including the return of negative equity owners, interest rate hikes and the withdrawal of government land sales, say analysts.

Sales of homes fell to 2,025, down 50 per cent month-on-month and 68 per cent year-on-year, according to Land Registry.

Midland Realty said there were 451 first-hand homes sold during the month, a drop of 78.9 per cent month-on-month.

Meanwhile, sales of used homes fell to 1,658, the lowest since Midland began recording data in 1996.

“The plunge in sales volume was mainly due to slow primary launches as developers hope to launch their brand new projects after Chinese New Year,” said Thomas Lam, Head of Valuation & Consultancy at Knight Frank.

READ MORE: After three years, Hong Kong home sales watchdog takes its first legal action against a developer

As there is usually a lag of a few weeks between a transaction and it being registered at the Land Registry, the January figures actually reflect the market conditions in December to early January.

Jeffrey Ng, senior executive director of Hong Kong Property Services (Agency), said buyers hesitated to enter the market after the United States announced its first interest rate increase in nearly a decade.

Hong Kong commercial banks are expected to follow in the coming months, pulling up mortgage rates. Lam said developers have to offer very attractive prices if they want to find buyers for their flats, especially in the New Territories.

Developers might even have to offer units at prices below the secondary market, he said.

Owners of existing homes have cut prices by more than 10 per cent around Hong Kong. Home prices, after a 12-year upcycle, fell 10 per cent from their peak in September. Some analysts expect prices to drop more than 30 per cent by 2017.



Church of England Critical of David Cameron’s Government on Refugees, Migrants

October 18, 2015


JOY! Refugees and migrants, on the Greek island of Lesbos, after crossing the Aegean Sea from Turkey Photograph by Dimitar Dilkoff, AFP, Getty Images

Syria refugees: Bishops urge David Cameron to do more

BBC News

David Cameron meets Syrian refugee families at a tented settlement camp in the Bekaa Valley on the Syrian - Lebanese border

David Cameron visited Syrian refugees in a camp in Lebanon last month. AP photo

Eighty-four Church of England bishops have revealed that they wrote to David Cameron last month urging him to accept at least 50,000 refugees from Syria.

The UK’s decision to accept 20,000 by 2020 was not adequate and most people wanted to offer more help, they said.

The Bishop of Durham, the Rt Rev Paul Butler, said it was “disheartening” they had not had a “substantive reply”.

Defence Secretary Michael Fallon said “nobody is doing more” than the UK “to help the refugees in their camps”.

The government has offered to accept 20,000 refugees from camps bordering Syria. It has also provided £1bn in aid to Syria, with an extra £100m given to charities to help thousands displaced by the conflict.

There has been debate in recent months about how countries should respond to the migrant crisis. This weekend Hungary closed its border with Croatia, while Slovenia put its army on standby to deal with migrants entering the country.

Syrian refugees in the UK: 20,000

More refugees will be resettled in the UK by 2020: 4,980

Syrian asylum seekers have been allowed to stay since 2011

  • 25,771 people applied for asylum in the UK in the year to end June 2015
  • 2,204 were from Syria
  • 87% of Syrian requests for asylum were granted
  • 145 Syrian asylum seekers have been removed from the UK since 2011

Bishop Butler said: “As the fighting intensifies, as the sheer scale of human misery becomes greater, the government’s response seems increasingly inadequate to meet the scale and severity of the problem.

He added: “There is an urgent and compelling moral duty to act which we as bishops are offering to facilitate alongside others from across civil society.”

Downing Street said the government wanted to tackle “the causes and consequences” of the refugee problem and that the UK was the second biggest donor in the world towards helping refugees in Syria, Lebanon, Jordan and Turkey.

Analysis: BBC religious affairs correspondent Caroline Wyatt

The decision by the 84 Church of England bishops to go public with their private letter to David Cameron is unusual, and an indication of their deep frustration at not having had what they would see as an adequate response.

But it is far from the first time that Church leaders have clashed with government. The bishops had to defend themselves from charges of political bias earlier this year, ahead of the general election, when they released an unprecedented manifesto that said it was the “duty” of every Christian to vote.

That 52-page letter warned that people felt “detached” from politics and called for a “fresh moral vision of the kind of country we want to be”. Although it was careful to praise the work of some earlier governments from both left and right, it was seen by many Conservative MPs as a distinctly left-leaning document, including references to the Trident nuclear deterrent, Britain’s relationship with the European Union and the welfare state.

Nonetheless, the bishops themselves would argue that it is their duty to offer moral leadership, and to speak out when they feel strongly that they and their flock wish the government to do more, and offer their help on the major issues of the day – however unwelcome that message may be to some.

In their letter, sent on 10 September, the bishops said they “recognise and applaud the leadership” Mr Cameron had shown when he announced the UK would accept 20,000 refugees but added the UK should do more to help tackle “one of the largest refugee crises ever recorded”.

“We believe such is this country’s great tradition of sanctuary and generosity of spirit that we could feasibly resettle at least 10,000 people a year for the next two years, rising to a minimum of 50,000 in total over the five-year period you foresaw in your announcement,” they wrote.

Syrian children in refugee camp in the Jrzinaz area, southern countryside of Idlib, Syria

Reuters photo

What is the UK doing to help?

Are refugees prepared for life in the UK?

Lives of Syrian refugees already in UK

Journey from Syria to Bradford

Crisis explained in graphics

The letter, signed by 84 of the Church’s 108 bishops, also said they would encourage churches and congregations to make spare housing available to refugees and promote foster caring.

Bishop of Manchester David Walker, a signatory, said he had come under pressure from parishioners to encourage action.

“People want to know what we are going to do,” he told BBC Breakfast.

‘Real issue’

But Mr Fallon said the “real issue” was in Syria.

He told the BBC: “We are spending £1bn helping the refugees in the refugee camps in Syria and now we have announced that we will take 20,000 – 5,000 a year for the rest of this parliament – which is a number we think we can reasonably accommodate.”

Neither the Archbishop of Canterbury Justin Welby nor the Archbishop of York John Sentamu signed the letter. Both have called for a compassionate response to the refugee crisis.

The Most Rev Justin Welby has previously offered to help with sanctuary for refugees in the form of a four-bedroom cottage in the grounds of Lambeth Palace.

The bishops’ letter comes a week after leading former judges and lawyers criticised the “slow and narrow” response to the crisis.


An extraordinary row between the Church of England and the prime minister has burst into the open as 84 bishops accuse David Cameron of ignoring their offers to help to provide housing, foster care and other support for up to 50,000 refugees.

In a remarkable move that shows their frustration at Downing Street’s foot-dragging, the bishops have released to the Observer a private letter they sent to the prime minister in early September. In it they called on him to increase the number of refugees that the UK is prepared to take over the next five years from 20,000 to 50,000, and to consider involving the church in a national effort to “mobilise the nation as in times past”.

Describing the mass movement of refugees as a “moral crisis”, the bishops offered to rally “churches, congregations and individuals” across the country behind efforts to make rental properties and spare housing available to those who had fled their homelands.

They also told Cameron they would “promote and support foster caring” across the C of E and wider community, so that thousands of unaccompanied children who had become homeless could find places to live and appropriate care.

Read the rest:

Hong Kong’s Leung Chun-ying Advised to Resist Temptation Of Government to “Fix” Everything

August 10, 2015

By Alex Lo
South China Morning Post

Leung Chun-ying says laissez-faire policy is outdated and the government needs to play a guiding role in the economy.

That immediately scares a lot of people, including me. I am no neo-liberal or free-market fanatic. I assume sometimes smart officials with well-defined policies and priorities can make wise and productive decisions at least some of the time.

If intervention means better welfare, education (and I don’t mean national education), health care, retirement funding and housing, I am all for it. But if it means building more white elephants like the Kai Tak cruise terminal and the underused Western Corridor to Shenzhen, then maybe not. The former will mean decisively reversing the budget cuts and neglect of our people’s welfare and well-being under Leung’s predecessors. The latter will mean continuing and following their folly.

So the question is how will the chief executive and his lieutenants plan their interventions? Do we have enough smart and competent people in government – or can we attract more of them – to think through and work out the full implications of Leung’s agenda? So far, Leung’s record has not been reassuring.

I applaud his welfare policy to help the elderly and needy by earmarking HK$50 billion and other subsidies that will increase recurrent funding. His goal of building close to half a million new flats in the next 10 years is laudable. But without sufficient land supply, the target of 480,000 new flats will remain a pipe dream.

However, his series of heavy-handed measures against property speculation and to cool an overheated market such as the imposition of extra stamp duties have proved to be pretty ineffective. His idea of a hi-tech push via a technology and innovation bureau, currently blocked by pan-democrats, is neither here nor there. It doesn’t look like it will waste a lot of money, but is unlikely to turn us into a hi-tech hub.

I am all for social policies and subsidies like education to help people, especially youngsters, to get ahead. God knows we need to reverse the downward mobility that is currently a dangerous trend for many young people. But the government should not tell people and industries how to get ahead.

Winners and Losers in China’s Deepening Economic Slowdown

January 20, 2015

The Associated Press

BEIJING — China’s economy, the world’s second largest, grew 7.4 percent last year, its slowest expansion in nearly a quarter century. Forecasters expect growth to wane further in the next several years as China emphasizes consumption over polluting heavy industry and manufacturing, which suffer from overinvestment and overcapacity. The IMF predicts growth of 6.3 percent in 2016, a dramatic shift from double digit rates in previous years that is creating winners and losers.


Industries that profited from China’s building boom are being battered by the ruling Communist Party’s effort to reduce reliance on investment and nurture more sustainable growth based on domestic consumption. Developers are losing access to credit and building permissions. Suppliers of steel, copper, cement and other building materials have seen orders dry up. That has wiped out jobs in construction and real estate sales and sent shockwaves abroad, hitting countries as far away as Australia and Brazil that export iron ore and other commodities. One developer, Kaisa Group, just missed a $23 million interest payment on a bond abroad, alarming investors. Export-driven manufacturing industries that employ millions of people have been hurt by weak global demand. As explosive growth in auto sales cools, China’s domestic brands are losing market share to global rivals and their state-owned manufacturing partners. Sales of cognac, Swiss watches, designer clothing and other luxury goods have been hurt by a ruling party campaign to rein in corruption and official extravagance. So has revenue at upscale restaurants and Macau casinos.


Big winners straddle the worlds of technology, private business and consumer brands — areas communist leaders want to promote as new sources of growth. E-commerce giant Alibaba Group’s revenue rose 54 percent in the quarter that ended in September. Revenue for rival jumped 61 percent. Milk producer Modern Dairy Ltd.’s revenue rose 86 percent in the six months ending in June. Novice entrepreneurs in some areas are benefiting from rule changes meant to make it easier to set up barber shops, restaurants and other small businesses. Energy-intensive industries including trucking benefit from the slump in global crude prices. E-commerce has produced unusual winners, including fledgling smartphone maker Xiaomi, which used Internet-based sales and marketing to slash costs and passed Samsung last year to become China’s No. 1 brand by number of handsets sold. A stock market boom has brought a surge of revenue and profit to brokerages and finance firms.


The slowdown is squeezing China’s prosperous east cities but inland the impact is even bigger. Regions that relied on coal mining, steel and other businesses tied to heavy industry and investment are struggling. Growth rates in areas such as Heilongjiang province in the northeast have fallen close to zero. Local authorities in coal country in China’s north have orders to nurture clean energy and other new industries but their efforts are slow to gain traction. Even prosperous areas have suffered: In the southeastern provinces of Guangdong and Zhejiang, home to export-driven producers of furniture, clothing and toys, weak foreign demand has forced hundreds of small factories to close.


Government-owned companies in oil, steel, banking, telecoms and other industries still enjoy monopolies and other privileges, but the ruling party’s plans, if carried out, will force them to compete. State companies still would be guaranteed control of an array of industries but the party says “market forces” will play a bigger role in allocating credit and other resources. In banking, regulators are gradually shifting the state-owned industry, which until now served to subsidize government companies, toward a market-oriented model with more lending to private business. State-owned steel and aluminum mills are under pressure to make their operations cleaner and more efficient. Oil giant Sinopec Ltd. is looking at ways to use its thousands of filling stations to sell groceries and other goods.


China Economic Growth Is Slowest in Decades

By Mark Magnier, Ian Talley and Lingling Wei
The Wall Street Journal

BEIJING—China’s economic growth slowed to 7.4% in 2014, downshifting to a level not seen in a quarter century and firmly marking the end of a high-growth heyday that buoyed global demand for everything from iron ore to designer handbags.

The slipping momentum in China, which reported economic growth of 7.7% in 2013, has reverberated around the world, sending prices for commodities tumbling and weakening an already soft global economy.

China’s economy grew 7.3% in the fourth quarter from a year earlier, the National Bureau of Statistics said, buttressed by targeted moves to ease borrowing. But it continued to face a housing glut, soaring debt and overcapacity in many industries, factors likely to erode growth in 2015.

Beijing had said it expected “about” 7.5% growth in 2014. The chief of the statistics bureau said Tuesday the rate was within that range.

Chinese stocks rose on the news, a day after their largest one-day drop in more than six years following a crackdown on margin trading.

While 7% growth would be the envy of most economies, Beijing says at least this level is needed to create enough jobs for China’s huge population. The Communist Party sees social stability as an essential component in maintaining its grip on power.

The results follow decades of growth that has hovered around 10%, one of the broadest, most rapid economic ascents in history that helped raise Chinese living standards and propel global growth and trade to new heights. Slipping economic momentum in China has had far-flung implications, squeezing Australian government budgets and Chilean copper mines that grew increasingly dependent on China’s ascent.

The slowdown comes at a vulnerable time for the world economy. The eurozone is at risk of a third recession in six years. Abenomics policies have failed to lift Japan out of stagnation.

And output in many major emerging markets—that provided most of the impetus for global growth over the past decade—is slowing faster than expected. The U.S. economy remains the one global bright spot, but it will struggle to make up for growing weakness elsewhere.

Economists see the slowdown of 2014 as the prelude to an extended deceleration of growth. The often bullish International Monetary Fund on Monday forecast 6.8% growth for China in 2015, a number below the 7.0% target economists expect Beijing to set.

“The housing slowdown is more serious than we thought earlier,” said IMF chief economist Olivier Blanchard in an interview.

Others are even more downbeat. Oxford Economics predicts 6.5% and says it expects this year will be the last time China’s growth exceeds 6%.

Leaders since mid-2014 have emphasized a “new normal” of slower growth. As the government tries to manage expectations, Premier Li Keqiang signaled Monday the economy would continue to face downward pressure this year.

How China addresses the slowdown matters to the leadership’s goal of restructuring the economy so it is powered by domestic consumption and service industries. Reliance on real estate, construction and smokestack industries has reached its limits, as evidenced by rising debt and polluted skies over much of the country.

Now President Xi Jinping and other leaders find themselves with constricted options to shore up the economy as they seek to avoid the missteps of large economic stimulus after the 2008 global financial crisis. Then, the leadership opened the credit taps to cushion a falloff in foreign demand and investment.

Now, the problems are at home, and many are hangovers from the earlier binge, as are a plethora of white-elephant projects, such as nearly empty malls, ghost cities and bridges to nowhere.

“This time around, they’re not giving money away,” said ING economist Tim Condon. “They don’t want to do that again.”

“Sure, they’d like to regain economic momentum,” said Royal Bank of Scotland economist Louis Kuijs. “But at the moment I don’t think anyone expects that.”

It is getting harder for the government to target credit to specific sectors, such as agriculture, and transportation, as banks balk at adding more nonperforming loans and borrowers hesitate.

LD Forge, a maker of forged valve components in Wenzhou, is among the companies that say its customers face cash-flow problems. “We are facing quite a lot of delays in payment,” said Yu Mingliang, the company’s vice president of business development. “We ended up suing one company.”

Even if it wants to ramp up spending, Beijing is bumping up against tapped-out local governments. That is partly by design: Much of what’s ailing the economy now is the result of rampant local-government borrowing via vehicles created for the purpose with little oversight. New policies have been aimed at reining in such loans.

As Beijing tries to speed up investments in airports and other infrastructure projects, these policies could leave the municipalities and provinces unable to find funds to see the plans through.

Funding constraints have already forced some cities to slow down big-ticket investments. In Wuhan, an industrial city in central China, the city government has halted construction of a bridge across the Yangtze River since last year due to insufficient funds, according to local officials familiar with the matter. The bridge, with a planned investment of about 8 billion yuan, could help ease local traffic congestion. Press officials in the city government didn’t respond to a request for comment.

An aggressive anticorruption campaign, which the government deems essential to maintaining the Communist Party’s grip on power, is also dragging down spending and, some analysts say, impeding government decision-making. Lu Ting, a China economist at Bank of America Corp., has estimated the austerity push has pared between 0.6 and 1.5 percentage points of growth from China’s GDP.

The World Bank has already downgraded its outlook for the global economy. In a report released last week it estimated the world economy would grow 3% this year, compared with the 3.4% projection it made last June. It said a slowdown in business investment in China alone could shave 0.3% to 0.5% from global economic output.

Speaking to an investor conference last week, General Motors Co. President Dan Ammann called China “the major engine of growth” for the global auto industry for the past decade and a half.


He said the auto maker still sees big opportunity in lower-profile cities in China, but “we’re no longer in an environment where you can just build something and expect to sell it.”

In recent months, as growth in China’s residential real estate has slowed, United Technologies Corp. has said it is coping thanks to stronger orders for government infrastructure and large commercial projects, like an order for 103 elevators and escalators for a new tower in the northern city of Tianjin.

Meanwhile, its Otis Elevator business has also been trying to boost the percentage of service contracts it maintains for elevators already installed in China, which can provide steady earnings even when construction growth slows.

The global effects of China’s slowdown have hit unevenly, with the World Bank projecting that emerging markets, whose economies rely more heavily on trade with China, will be hit the hardest. The World Bank estimates economic output in Brazil will expand just 1% in 2015, down from a June forecast of 2.7%.

Commodities importers, on the other hand, might receive some secondhand benefits as the price of imported shipments decline. The U.S. could be among these beneficiaries. The World Bank raised its estimate of U.S. economic growth to 3.2% from 3.0%.

Should growth decline precipitously in coming months, economists say Beijing has a number of options, including deeper interest rate cuts, faster spending on infrastructure projects and sequential reductions in the capital that banks must hold on reserve with the central bank. The risk, however, is that if pursued too aggressively such measures could worsen overcapacity and pile up more debt.

“If things start to deteriorate rapidly, they might have to shift their policy approach,” said Julian Evans-Pritchard, an economist with research firm Capital Economics. “But if it doesn’t, I don’t expect much change in policy.”

—John Stoll, Ted Mann, Bob Davis and Lilian Lin contributed to this article

Write to Mark Magnier at, Lingling Wei at lingling.wei, and at Ian Talleyat