HK Property Sector Residential 8may2023 HK IG

Industry Outlooks
Hong Kong Property (Residential)

Refer to important disclaimers at the end of this report
DBS Group Research . Asian Insights Office 8 May 2023

17 September 2015
Overall Outlook
Sentiment in the residential market has noticeably improved following the re-opening of the border with Mainland
China which plays a key role in reviving the local economy. Faced with higher inventory levels, major developers
adopted a conservative pricing strategy to move sales. This contributed to a strong rebound in sales volume in
the primary market. Secondary market prices also regained lost ground with 7.4% growth in 3M23 following a
15% price correction in 2022.
Talent inflow to bolster medium-term home demand. Ongoing post pandemic economic recovery should
underpin housing demand. While mortgage rate hikes are likely to come to an end, financial market volatility
should remain a drag on demand. We project upcoming residential completions to be slightly higher than in the
previous years. Hence, developers are likely to maintain a volume-driven sales strategy to make up for the sales
shortfall in the previous year. We forecast home price to rise 0-3% for the rest of the year. A potential boost to
demand in the medium-term would be talent inflow led by The Top Talent Pass Scheme. Resumption of Capital
Investment Entrant Scheme could add spice to demand recovery.
ed- JS/ sa- CS / AH

Industry Outlooks
Key Industry Trends

Sentiment in residential market has noticeably improved following the border re-opening with China. Major
developers have resumed to launch new projects in Feb-22, and market response has been encouraging.
Wheelock first offered KOKO ROSSO (KOKO Hill Ph 3A) in Lam Tin for pre-sale in Feb-22 and sold 308 units for
HK$18,900psf on average. This represented >78% of the total of 392 units. On the heels of a strong response to
the launch of KOKO ROSSO, Wheelock immediately launched KOKO MARE (KOKO Hill Ph 3B) to tap the insatiable
demand. The company sold 174 units for HK$18,700psf on average. Overall, Wheelock has generated sale
proceeds of >HK$4bn from selling KOKO Hill Ph 3.
In One is the best-selling project. Chinachem Group sold 180 units and 165 units at In One Ph 1B and In One Ph
1C for HK$5.9bn, which represented 98% and 77% of total of the respective phases. This makes it the best-selling
project YTD. Average selling prices have exceeded HK$27,000psf. In One is located above the Ho Man Tin MTR
Station, an interchange of Tuen Ma Line, East Rail and Kwun Tong Line Extension. Developed in three phases, In
One will provide a total of 844 units when completed in 2024.
Mass market projects in Tuen Mun has drawn a strong response. Elsewhere, the launch of NOVO Land Ph 2B and
Grand Jete Ph2, both in Tuen Mun, were greeted with overwhelming response in March. SHKP has sold >690
units, or 95% of the total, at NOVO Land Ph 2B for >HK$4bn. Over 360 units at Grand Jete Ph 2, representing 90%
of the total, were snapped up for >HK$1.6bn or HK$13,400psf on average.
Developments in Northern Metropolis are selling well. Star Properties launched After the Rain in Yuen Long for
pre-sale in Mar-23 and has since sold 150 units or 45% of the total for >HK$900m. ASP is close to HK$15,000psf.
Star Properties converted the site into residential use from industrial via paying a land premium of HK$818m or
HK$4,780psf in 2021. The project is 8-10 minute walk from Long Ping MTR Station, which takes 35 minutes to
Central by subway. Scheduled for completion in 2023, After the Rain comprises 335 units with 171,146sf GFA.
Elsewhere, Henderson Land has sold >350 units at One Innovale Bellevue/One Innovale Cabanna in Fanling YTD.
SHKP also offloaded >70 completed units at Grand YOHO II in Yuen Long. Projects in Northern Metropolis are well
sought after by home purchasers.
Revival in luxury home demand. YTD, Sino Land has sold 19 apartments at St. George’s Mansions in Ho Man Tin
for >HK$1.8bn, reflecting a revival in luxury home demand.
Attractive prices to lure homebuyers. We attribute the better response to attractive pricing which has helped to
draw market interest. Grand Jete Ph 2 was a case in point. The average selling price was 15% below that of Ph 1
which went on sale in Jun-22. In Mar-23, Henderson Land relaunched Baker Circle Euston in Hung Hom. This
project was first put onto the market in Nov-22 but response was mediocre. To move sales, the company slashed
the offer price by 8-10% to HK$19,400psf to lure homebuyers and market response improved remarkably
with >120 units sold since it was re-launched. In 2022, the number of transactions in the primary market fell
41.3% to 10,261, leading to increased inventory. To move sales, developers cannot but adopt a flexible pricing
strategy.
Page 2
Industry Outlooks
Major project launches YTD

Launch Projects Location Developer Total Units Units sold % sold ASP
Jan-23 The Corniche Ap Lei Chau KWG/Logan 295 2 1% (HK$psf)
50,000
Feb-23 KOKO ROSSO Lam Tin Wheelock 392 308 79% 18,900
Feb-23 The Aster Happy Valley Kerry Properties 106 21 20% 27,000
Mar-23 NOVO Land Ph 2B Tuen Mun SHKP 729 694 95% 14,000
Mar-23 Bal Residence Kwun Tong Lai Sun Development 156 6 4% 18,000
Mar-23 After the Rain Yuen Long Star Properties 335 150 45% 15,000
Mar-23 In One Ph 1B Ho Man Tin Chinachem Group 183 180 98% 27,000
Mar-23 Grand Jete Ph 2 Tuen Mun Cheung Kong/SHKP 400 362 91% 13,400
Apr-23 KOKO MARE Lam Tin Wheelock 444 174 39% 18,700
Apr-23 In One Ph 1C Ho Man Tin Chinachem Group 214 165 77% 28,000
Source: Local press, DBS HK
Sales at new projects are rebounding. The number of sales and purchase registrations in the primary market
jumped 62.8% y-o-y and 114.8% q-o-q to 2,780 in 1Q23. Total transaction value reached HK$33.4bn, up 34.5% y-
o-y and 117.6% q-o-q. The secondary market mirrored a similar trend, with 10,208 units changing hands,
representing growth of 33% y-o-y and 58.7% q-o-q. Total transaction value surged 17.2% y-o-y and 53% q-o-q to
HK$85bn.
Primary market transaction volume Remarks

No of units Mar-23 3M23
4,000 1. Total primary market
175.3% m-o-m 62.8% y-o-y
3,500 transaction volume
1006.2% y-o-y jumped 62.8% y-o-y
3,000
in 1Q23.
2,500
2,000
1,500
1,000
500
0
Jan-14
Jan-17
Jan-20
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Jan-15
Jan-16
Jan-18
Jan-19
Jan-21
Jan-22
Jan-23
Jul-15
Jul-18
Jul-09
Jul-10
Jul-11
Jul-12
Jul-13
Jul-14
Jul-16
Jul-17
Jul-19
Jul-20
Jul-21
Jul-22
Source: Centaline Property Agency
Page 3
Industry Outlooks
Primary market transaction value Remarks
HK$m Mar-23 3M23 1. Total transaction

45,000 111.9% m-o-m 34.5% y-o-y
value in primary
40,000 432.8% y-o-y
market was 34.5% y-
35,000
o-y higher in 1Q23.
30,000
25,000
20,000
15,000
10,000
5,000
0
Jul-09
Jul-12
Jul-15
Jul-10
Jul-11
Jul-13
Jul-14
Jul-16
Jul-17
Jul-18
Jul-19
Jul-20
Jul-21
Jul-22
Jan-11
Jan-14
Jan-09
Jan-10
Jan-12
Jan-13
Jan-15
Jan-16
Jan-17
Jan-18
Jan-19
Jan-20
Jan-21
Jan-22
Jan-23
Secondary market transaction volume Remarks

No of units Mar-23 3M23
14,000 1. Total transaction
37.2% m-o-m 33% y-o-y
volume in secondary
12,000
79.9% y-o-y market posted 33% y-
10,000 o-y growth in 1Q23.
8,000
6,000
4,000
2,000
0
Jan-11
Jan-19
Jan-09
Jan-10
Jan-12
Jan-13
Jan-14
Jan-15
Jan-16
Jan-17
Jan-18
Jan-20
Jan-21
Jan-22
Jan-23
Jul-15
Jul-09
Jul-10
Jul-11
Jul-12
Jul-13
Jul-14
Jul-16
Jul-17
Jul-18
Jul-19
Jul-20
Jul-21
Jul-22
Page 4
Industry Outlooks
Secondary market transaction value Remarks

HK$m
Mar-23 3M23
60,000 1. Total transaction value
39.6% m-o-m 17.2% y-o-y in secondary market
50,000 59.4% y-o-y posted 17.2% y-o-y
growth in 1Q23.
40,000
30,000
20,000
10,000
0
Jan-10
Jan-15
Jan-19
Jan-09
Jan-11
Jan-12
Jan-13
Jan-14
Jan-16
Jan-17
Jan-18
Jan-20
Jan-21
Jan-22
Jan-23
Jul-10
Jul-14
Jul-19
Jul-09
Jul-11
Jul-12
Jul-13
Jul-15
Jul-16
Jul-17
Jul-18
Jul-20
Jul-21
Jul-22
Prices in the secondary market are recovering. In tandem with improved market activities, home prices also
staged a rebound. According to Centa-City Leading Index, residential prices in the secondary market recovered
7.4% in 3M23 after falling 15% in 2022. Mass market projects exhibited slightly better price recovery of 8.3% in
the same period.
Centa-City Leading Index - Overall Remarks
225 Home price growth

3M23: +7.4% 2015: +2.6% 1. Overall home price
205 2022: -15.1% 2014: +11.2% recovered 7.4% in
2021: +4.7% 2013: +2.8%
185 2020: -1.1%
1Q23.
2012: +21.3%
2019: +2.1% 2011: +8.0%
165
2018: +5.7% 2010: +19.3%
2017: +14.0%
145
2016 :+6.5%
125
105
85
65
Jan 10
Jan 11
Jan 12
Jan 13
Jan 14
Jan 15
Jan 16
Jan 17
Jan 18
Jan 19
Jan 20
Jan 21
Jan 22
Jan 23
Jul 10
Jul 11
Jul 12
Jul 13
Jul 14
Jul 15
Jul 16
Jul 17
Jul 18
Jul 19
Jul 20
Jul 21
Jul 22
Page 5
Industry Outlooks
Centa-City Leading Index – Small to medium units Remarks

Home price growth
3M23: +8.3% 2016 :+7.0% 1. Home price for mass
2022: -16.0% 2015: +2.7% market projects
205
2021: +4.2% 2014: +12.3%
2020: -1.1% 2013: +3.2% exhibited recovery of
185
2019: +2.6% 2012: +23.3% 8.3%.
165 2018: +5.5% 2011: +8.1%
2017: +14.4% 2010: +18.9%
145
125
105
85
65
Jan 10
Jan 11
Jan 12
Jan 13
Jan 14
Jan 15
Jan 16
Jan 17
Jan 18
Jan 19
Jan 20
Jan 21
Jan 22
Jan 23
Jul 10
Jul 11
Jul 12
Jul 13
Jul 14
Jul 15
Jul 16
Jul 17
Jul 18
Jul 19
Jul 20
Jul 21
Jul 22
Huge residential supply in Kai Tak. In 1Q23, there were no new projects for sale in Kai Tak. The number of
completed but unsold units has exceeded 2,100 as of Mar-23. About one-third is from Henderson Land’s The
Henley Park (740 units) which has yet to be launched. A total of c.1,100 units at newly launched Miami Quay I and
Pano Harbour remained unsold.
Pre-sale consents have been obtained for Miami Quay II, KT Marina (NKIL 6577), Twin Victoria (NKIL 6603), The
Knightsbridge (NKIL 6552) and NKIL 6576 but these have yet to be launched for sale. These projects provide a
total of >5,500 units. KT Marina Ph 1 (1071 units), Twin Victoria (702 units) and The Knightsbridge (566 units) are
expected to go on pre-sale in the coming months. Most projects in Kai Tak are developed by consortiums with
similar members such as Wheelock, New World, Henderson Land, China Overseas Land and K.Wah International.
With large availability of residential stocks in the area on one hand and high development costs on the other,
developers are careful in formulating their sales strategies.
In addition, pre-sale consents for four other developments, mainly built on the runway of the former airport, are
awaiting government approval, and account for c.4,300 units. All considered, about 13,000 units in Kai Tak, largely
developments on the runway of the former airport, will be available for sale over the next one to two years.
Easing stamp duty for first time homebuyers. In the Budget Speech announced in Feb-23, the government has
also cut value bands of the ad valorem stamp duty, easing the financial burden for first-time home buyers of
small-to-medium residential properties valued <HK$10m.
Interest rate upcycle to peak soon. In Mar-23, HSBC and Hang Seng Bank lowered the mortgage cap rate from
prime rate minus 2% to prime rate minus 2.25%. Moreover, we expect the prime rate to peak out after rising by
another 25bps to 5.875% in 2Q23. Effective mortgage rate would then increase to 3.625% which should add
minimal additional financial burden to homebuyers.
Page 6
Industry Outlooks
US Fed fund rate Remarks

%
6
0
Jan-17
Jan-18
Jan-19
Jan-20
Jan-12
Jan-13
Jan-14
Jan-15
Jan-16
Jan-21
Jan-22
Jan-23
Source: Bloomberg Finance L.P.
Prime rate Remarks

%
9.0 1. Prime rate increased
8.0 to 5.625%.
7.0
6.0 Prime: 5.625%
5.0
4.0
3.0
2.0
1.0
0.0
Jan-15
Jan-07
Jan-09
Jan-11
Jan-13
Jan-17
Jan-19
Jan-21
Jan-23
HK Prime rate
Page 7
Industry Outlooks
Effective mortgage rate Remarks

%
12
Apr-23: 3.375%
10
0
Jan-96
Jan-97
Jan-98
Jan-99
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Jan-14
Jan-15
Jan-16
Jan-17
Jan-18
Jan-19
Jan-20
Jan-21
Jan-22
Source: CEIC, DBS HK
Volatile financial market remains a drag on demand. On the other hand, the collapse of SVB and Credit Suisse
have increased volatility on financial markets which should continue to be overshadowed by global macro
uncertainties and geo-political tensions. This should continue to be an overhang on housing market sentiment.
Hang Seng Index Remarks
28,000
26,000
24,000
22,000
20,000
18,000
16,000
14,000
12,000
10,000
Aug-22
Mar-22
Mar-23
Jan-22
Jun-22
Dec-22
Jan-23
May-22
Apr-22
Sep-22
Apr-23
Feb-22
Feb-23
Jul-22
Nov-22
Oct-22
More project launches ahead with conservative pricing strategy. In 2023-25, we forecast the number of primary
units to be completed averaging 19,850, about 10% higher than the average over the past five years. Of these,
less than 20% have been pre-sold. Against this backdrop, we expect major developers to roll out more project
launches in the months ahead to tap on improving market demand.
Page 8
Industry Outlooks
Private residential supply Remarks

No of units
40,000 Average completion (96-22)
17,858 units
35,000
Average units sold (96-22)
30,000 17,825 units
25,000
20,000
15,000
10,000
5,000
0
2002
2009
2014
2016
2021
1996
1997
1998
1999
2000
2001
2003
2004
2005
2006
2007
2008
2010
2011
2012
2013
2015
2017
2018
2019
2020
2022
2023E
2024E
2025E
Completion No of primary units sold Average
Source: DBS HK
After NOVO Land Ph2A was substantially sold, SHKP is currently offering University Hill in Tai Po for sale. This will
be followed by NOVO Land Ph2B and Tin Wing Stop development. The YOHO Hub Ph2, a single-block residential
tower in Ho Man Tin and two residential projects in Kai Tak are also available for sale in 2H23.
Henderson Land plans to launch five residential projects in Kai Tak, including four joint venture developments
along the former runway, in 2023. Elsewhere, five redevelopment projects in Cheung Sha Wan, Sham Shui Po,
Hung Hom and Kowloon City are also available for pre-sale.
Sino Land plans to launch Grand Mayfair Ph 2, Villa Garda III, Wong Chuk Hang Station Package 4, Yau Tong
Ventilation Building site, Lohas Park Package 13 and One Central Place with total attributable GFA of 1.14msf.
Except for One Central Place, the five are joint venture projects located adjacent to MTR stations. This points to
strong transportation accessibility which should ensure good marketability. One Central Place, a joint venture with
Urban Renewal Authority, is in the heart of Central and should attract strong investment demand when it goes on
sale.
To expedite sales, developers are expected to maintain a conservative pricing strategy, especially for mass market
projects. Overall, we forecast the number of primary units sold in 2023 to rise by 40-50%. Home price should
increase by 0-3% during the rest of this year.
Page 9
Industry Outlooks
Expected project launches in the coming year

Project / L ot no L oca t ion L oca t ion St a ke (% ) T ot a l no. of unit s R em a rk
C heung Kong A sset Hold ing s
Wong Chuk Hang Station Package 3B HK Wong Chuk Hang 100 642 Presale consent pending approval
Wong Chuk Hang Station Package 3C HK Wong Chuk Hang 100 558 Presale consent pending approval
The Coast Line Ph 1 Kln Yau Tong 100 228 Presale consent pending approval
Sun Hung Ka i Prop ert ies
Victoria Harbour Ph 2B-2 HK North Point 100 123 Pre-sale consent obtained in May-20
Victoria Harbour Ph 2B-3 HK North Point 100 228 Pre-sale consent obtained in May-20
KIL 11230 Kln Ho Man Tin 58 75 JV with Wheelock
NKIL 6551 Ph 1 Kln Kai Tak 100 256 Presale consent pending approval
TSWTL 23 NT Tin Shui Wai 100 1393 Presale consent pending approval
NOVO LAND Ph 2A NT Tuen Mun 100 929 Presale consent granted in Jan-23
NOVO LAND Ph 3A NT Tuen Mun 100 534 Presale consent pending approval
NOVO LAND Ph 3B NT Tuen Mun 100 769 Presale consent pending approval
TPTL 253 Ph 1A NT Sai Kung 100 781 Presale consent pending approval
TPTL 253 Ph 1B NT Sai Kung 100 794 Presale consent pending approval
TPTL 253 Ph 2A NT Sai Kung 100 727 Presale consent pending approval
Silicon Hill Ph 2A NT Tai Po 100 607 Presale consent obtained in May-22
Silicon Hill Ph 2B NT Tai Po 100 688 Presale consent obtained in Jun-22
Hend erson L a nd
Elgin Street HK Central 100 200 Old lease
The Henley Park Kln Kai Tak 100 740 Presale consent obtained in Mar-22
Miami Quay Ph 2 Kln Kai Tak 29.3 571 JV with Wheelock, New World & Empire Group
NKIL 6576 Ph 1 Kln Kai Tak 30 361 Presale consent obtained in Oct-22
NKIL 6554 Ph 1A Kln Kai Tak 30 635 JV with K.Wah, Wharf & COLI
NKIL 6554 Ph 1B Kln Kai Tak 30 511 JV with K.Wah, Wharf & COLI
NKIL 6554 Ph 2A Kln Kai Tak 30 405 JV with K.Wah, Wharf & COLI
NKIL 6554 Ph 2B Kln Kai Tak 30 509 JV with K.Wah, Wharf & COLI
The Knightsbridge Kln Kai Tak 18 566 Presale consent obtained in Mar-23
18 Bulkeley Street Kln Hung Hom 100 278 Old lease
456-466 Sai Yeung Choi Street North Kln Sham Shui Po 100 537 Old lease
Berwick Street project, Ph 1 Kln Shek Kip Mei 100 738 Old lease
4-24 Nam Kok Street Kln Kolwoon City 76 313 Old lease
Sino L a nd
One Central Place HK Central 100 121 Presale consent obtained in Nov-21
Wong Chuk Hang Station Package 4A HK Wong Chuk Hang 25 432 Presale consent obtained in Nov-22
Wong Chuk Hang Station Package 4B HK Wong Chuk Hang 25 368 Presale consent obtained in Dec-22
NKIL 6602 Kln Yau Tong 80 792 JV with CSI Props
Grand Mayfair Ph 2 NT Yuen Long 33 680 Pre-sale consent obtained in Sep-22
Villa Garda II NT Tseung Kwan O 40 644 Pre-sale consent obtained in Jun-22
Villa Garda III NT Tseung Kwan O 40 644 Pre-sale consent obtained in Jun-22
New W orld D evelop m ent
Miami Quay Ph 2 Kln Kai Tak 29.3 571
JV with Henderson Land, Wheelock & Empire Group
W heelock & C o
KIL 11230 Kln Ho Man Tin 42 75 JV with SHKP
Miami Quay Ph 2 Kln Kai Tak 29.3 JV
571
with Henderson Land, New World & Empire Group
NKIL 6577 Ph 1 Kln Kai Tak 40 1,017 Presale consent obtained in Jul-22
NKIL 6577 Ph 2 Kln Kai Tak 40 1,121 Presale consent obtained in Aug-22
The Knightsbridge Kln Kai Tak 18.0 566 Presale consent obtained in Mar-23
Lohas Park Package 12A NT Tseung Kwan O 100.0 650 Presale consent pending approval
Lohas Park Package 12B NT Tseung Kwan O 100.0 685 Presale consent pending approval
Lohas Park Package 12C NT Tseung Kwan O 100.0 650 Presale consent pending approval
Source: DBS HK
Page 10
Industry Outlooks
Expected project launches in the coming year

Project / L ot no L oca t ion L oca t ion St a ke (% ) T ot a l no. of unit s R em a rk
W ha rf Hold ing s
NKIL 6554 Ph 1A Kln Kai Tak 30 635 JV with K.Wah, Henderson Land & COLI
NKIL 6554 Ph 1B Kln Kai Tak 30 511 JV with K.Wah, Henderson Land & COLI
NKIL 6554 Ph 2A Kln Kai Tak 30 405 JV with K.Wah, Henderson Land & COLI
NKIL 6554 Ph 2B Kln Kai Tak 30 509 JV with K.Wah, Henderson Land & COLI
NKIL 6579 Ph 1 Kln Kolwoon Tong 100 28 Presale consent pending approval
Kerry Prop ert ies
K. W a h I nt erna t iona l
2 Grampian Road Kln Kolwoon Tong 100 6
NKIL 6554 Ph 1A Kln Kai Tak 10 635 JV with Henderson Land, Wharf & COLI
NKIL 6554 Ph 1B Kln Kai Tak 10 511 JV with Henderson Land, Wharf & COLI
NKIL 6554 Ph 2A Kln Kai Tak 10 405 JV with Henderson Land, Wharf & COLI
NKIL 6554 Ph 2B Kln Kai Tak 10 509 JV with Henderson Land, Wharf & COLI
NKIL 6577 Ph 1 Kln Kai Tak 40 1,017 Presale consent obtained in Jul-22
NKIL 6577 Ph 2 Kln Kai Tak 40 1,121 Presale consent obtained in Aug-22
Villa Garda II NT Tseung Kwan O 30 644 Pre-sale consent obtained in Jun-22
Villa Garda III NT Tseung Kwan O 30 644 Pre-sale consent obtained in Jun-22
Swire Prop ert ies
F a r Ea st C onsort ium
T a i C heung
Pulsa HK Repulse Bay 100 8
C hina Oversea s L a nd
NKIL 6554 Ph 1A Kln Kai Tak 30 635 JV with Henderson Land, Wharf & K.Wah
NKIL 6554 Ph 1B Kln Kai Tak 30 511 JV with Henderson Land, Wharf & K.Wah
NKIL 6554 Ph 2A Kln Kai Tak 30 405 JV with Henderson Land, Wharf & K.Wah
NKIL 6554 Ph 2B Kln Kai Tak 30 509 JV with Henderson Land, Wharf & K.Wah
NKIL 6577 Ph 1 Kln Kai Tak 20 1,017 JV with wheelock & K.Wah
NKIL 6577 Ph 2 Kln Kai Tak 20 1,121 JV with wheelock & K.Wah
Twin Victoria Kln Kai Tak 702 Presale consent obtained in Mar-23
A sia St a nd a rd
High Park Ph 1 NT Hung Shui Kiu 100 623 Presale consent pending approval
High Park Ph 2 NT Hung Shui Kiu 100 402 Presale consent pending approval
Shim a o Group
NKIL 6542 Ph 1 Kln Beacon Hill 100 332 Presale consent obtained in Jan-22
C hina chem
In One Ph 1A Kln Ho Man Tin 100 447 Presale consent obtained in Oct-22
NKIL 6627 RP Kln Cheung Sha Wan 100 198 Presale consent pending approval
LN 1003 RP DD214 NT Sai Kung 100 40 Presale consent pending approval
Grea t Ea g le
Ho Man Tin Station Ph 2A Kln Ho Man Tin 100 418 Presale consent obtained in Oct-22
Ho Man Tin Station Ph 2B Kln Ho Man Tin 100 572 Presale consent obtained in Oct-22
L a i Sun D evelop m ent
Bal Residence Kln Kwun Tong 100 156 Presale consent obtained in Dec-22
LN 5382 DD 116 NT Yuen Long 100 112 Presale consent obtained in Jan-23
Hong Kong F erry
The Symphonie Kln Sham Shui Po 100 262 Presale consent obtained in May-22
Va nke Prop ert y
TPTL 243 Ph 1 NT Tai Po 100 404 Presale consent pending approval
R oa d King
TMTL 520 NT Tuen Mun 698 Presale consent pending approval
K& K Prop ert y
One Stanley HK Stanley 100 82 Presale consent pending approval
W a ng On Prop ert ies
IL 8755 HK Pokfulam 100 7 Presale consent pending approval
Ot her D evelop ers
Pallas NT Cheung Sha 100 25 Presale consent pending approval
Terra Kln Ho Man Tin 45 Presale consent pending approval
55 Kwun Tong Road Kln Kwun Tong 807 Presale consent pending approval
TMTL 516 NT Tuen Mun 100 80 Presale consent pending approval
Source: DBS HK
Page 11
Industry Outlooks
At of the end of 2022, Hong Kong population was 7.33m, down 0.9% y-o-y. This marked the third consecutive year
of a population decline. This was partly driven by net outflow of Hong Kong residents with outbound migration
being a contributing factor. Such a trend does not bode well for economic and housing demand growth over the
medium term.
Hong Kong Population Remarks

M
1. Hong Kong
7.6
population was 0.9%
7.5
y-o-y lower as of the
7.4
end of 2022.
7.3
7.2
7.1
7.0
6.9
6.8
Jun-11
Jun-12
Jun-13
Jun-14
Jun-15
Jun-16
Jun-17
Jun-18
Jun-19
Jun-20
Jun-21
Jun-22
Source: DBS HK
Incoming talent to drive demand. To attract talent back to Hong Kong after the recent outflows, the government
has launched the Top Talent Pass Scheme for a period of two years to attract high earners and graduates from
top universities. Since the introduction of the new talent admission scheme three months ago, the government
has approved about 12,000 out of over 20,000 applications. Among these successful applicants, many are from
Mainland China. Overall, the government aims to attract at least 35,000 talents per annum with an intended
duration of stay for more than one year through various talent admission schemes between 2023 and 2025. The
government has streamlined the application procedures in the existing General Employment Policy and the
Admission Scheme for Mainland Talent and Professionals.
Moreover, qualified incoming talents buying their first home in Hong Kong will be given a refund of the additional
stamp duties such as Buyer’s Stamp Duty & New Residential Stamp Duty, upon becoming permanent residents.
Therefore, the overall stamp duty charged for eligible talent will be on par with first time local home buyers. We
believe that these incoming talents could constitute a new source of housing demand in Hong Kong in the
medium term, supporting overall residential market.
Attracting more capital to the city. A new Capital Investment Entrant Scheme will be introduced after more than 7
years of suspension. To qualify to reside in Hong Kong under this scheme, the applicants are required to invest a
certain amount into local assets other than property. Having said that, these rich immigrants could create
additional demand for the residential sector.
Page 12
Industry Outlooks
Kerry Properties clinched Tsuen Wan site. YTD, the government sold only one residential site via tender. The
Tsuen Wan site attracted 10 bidders and finally went to Kerry Properties for HK$1.44bn or HK$4,578psf in Feb-23.
The winning bid was near the high end of market consensus - rarely seen since mid-2022. Located on Po Fung
Road near One Kowloon Peak, the site will provide residential GFA of 0.31msf with sea views when completed.
Tenders of Stanley site and Oyster Bay Package 1 withdrawn. On the other hand, the tender of the Stanley
residential lot was withdrawn in Jan-23 as the four bids failed to meet the government’s reserved prices. Upon
completion, this residential plot would offer GFA of 0.48msf with 640 units expected to be built. The Stanley site
was included in the land sales program for FY23/24 and will be launched for tender again in the coming twelve
months.
In 1Q23, MTRC withdrew the tender of Oyster Bay Package 1 which would offer total GFA of 1.31msf including
67,000sf of retail space. Only three developers including Cheung Kong Asset Holdings, SHKP and Wheelock
participated in the tender and their bids did not meet the company’s expectations. This package will be re-
launched for tender in the coming year.
Land sales YTD

Government Tender
Date Project/Lot No Location Location Usage GFA Land Land Developers Est. no of
Premium Premium units
(sf) (HK$m) (HK$psf)
Jan-23 RBL1204 Stanley HK R 480,231 Withdrawn 640
Feb-23 TWTL427 Tsuen Wan NT R 314,306 1,439 4,578 Kerry Properties 490
Railway Project Tender
Feb-23 Oyster Station Ph 1 Siu Ho Wan NT R 1,313,000 Withdrawn 1,900
Source: Lands Department, MTR Corp
China Resources Group has cast a vote of confidence. In late January, China Resources Group converted Yun Fat
Godown in Cheung Sha Wan into residential/retail use after paying land premium of HK$13.73bn or HK$8,692psf
to the government. Upon completion, the site will provide total GFA of 1.58msf, split into 1.48msf for residential
use and 98,748sf for retail purpose. China Resources Group and China Resources Land own 55% and 45% in this
large-scale project which offers c.2500 units when completed.
New land sales program unveiled. In Feb-22, the government announced the land sales program for the fiscal
year 2023/24. A total of twelve residential lots are scheduled for government tender which will altogether provide
9,120 units upon project completion. Two sites, one in Yau Kam Tau and the other in Kennedy Town, will be
offered for tender in 2Q23, providing 2400 units in total.
MTRC intends to tender three projects in this fiscal year. They are all on Lantau Island including Oyster Bay
Package 1 & 2 and Tung Chung East Station Package 1 which will altogether offer 4,530 units. Urban Renewal
Authority (URA) will tender out three redevelopment projects including two in Kowloon City and one in Wong Tai
Sin. About 2,200 units are expected to be erected on these sites. Including the usage conversion and private
residential redevelopment, the government forecast about 20,550 units to be built from land supply in the
current fiscal year.
Page 13
Industry Outlooks
Estimated Private Housing Land Supply in 2023-24

Source of land supply FY23/24E
Residential Est. no of units
Government land sale 9,120
Railway property development project 4,530
Project of the URA 2,200
Property redevelopment subject to lease modification/land exchange 2,600
Property redevelopment not subject to lease modification/land exchange 2,100
Total 20,550
Source: Development Bureau
List of residential sites

Site Location Location Est no of units
Government tender (9120 units)
Cape Road Stanley HK 640
Junction of Sai Ning Street and Victoria Road Kennedy Town HK 450
Kai Tak Area 2A2, 2A3* Kai Tak Kln 1,310
Kai Tak Area 4B5 Kai Tak Kln 1,470
Tung Chung Road Cheung Sha NT 100
Hoi Sha Path Cheung Sha NT 50
Castle Peak Road - So Kwun Wat, Area 48 Tuen Mun NT 1,600
Yau Kam Tau Tsuen Wan NT 1,950
Clear Water Bay Sai Kung NT 330
Tung Chung Area 106A Tung Chung NT 460
Tung Chung Area 106B Tung Chung NT 300
Tung Chung Area 106C Tung Chung NT 460
MTRC (4530 units)

Oyster Station Package 1 Tung Chung NT 1,900
Oyster Station Package 2 Tung Chung NT 1,600
Tung Chung East Station Package 1 Tung Chung NT 1,030
URA (2200 units)

Shing Tak Street/Ma Tau Chung Road Kowloon City Kln 640
Kai Tak Road/Sa Po Road Kowloon City Kln 810
Nga Tsin Wai Village Wong Tai Sin Kln 750
Source: Development Bureau, press
Risk & Regulation

Any derailment of post-COVID economic recovery domestically could dent residential demand. Stronger-than-
expected interest rate hikes could further dampen home buying interest. Any unfavourable policy change would
have negative implications on housing demand. Additionally, any volatility in the financial markets could trigger
panic selling by those hit by financial losses and lead to home price correction.
Page 14
Industry Outlooks
Our In-house Expert

Jeff Yau, CFA
jeff_yau@dbs.com
+852 3668 4180
Percy Leung
percyleung@dbs.com
+852 3668 4165
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Industry Outlooks

Hong Kong Property (Residential)

DBS Group Research . Asian Insights Office 8 May 2023

ed- JS/ sa- CS / AH

Key Industry Trends

Major project launches YTD

Source: Local press, DBS HK

Primary market transaction volume Remarks

Source: Centaline Property Agency

Primary market transaction value Remarks

HK$m Mar-23 3M23 1. Total transaction

Source: Centaline Property Agency

Secondary market transaction volume Remarks

Source: Centaline Property Agency

Secondary market transaction value Remarks

Source: Centaline Property Agency

Centa-City Leading Index - Overall Remarks

225 Home price growth

Source: Centaline Property Agency

Centa-City Leading Index – Small to medium units Remarks

Source: Centaline Property Agency

US Fed fund rate Remarks

Source: Bloomberg Finance L.P.

Prime rate Remarks

Source: Bloomberg Finance L.P.

Effective mortgage rate Remarks

Source: CEIC, DBS HK

Hang Seng Index Remarks

Source: Bloomberg Finance L.P.

Private residential supply Remarks

Expected project launches in the coming year

Expected project launches in the coming year

Hong Kong Population Remarks

Land sales YTD

Source: Lands Department, MTR Corp

Estimated Private Housing Land Supply in 2023-24

Source: Development Bureau

List of residential sites

MTRC (4530 units)

URA (2200 units)

Source: Development Bureau, press

Risk & Regulation

Our In-house Expert

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