Hong Kong's top developer sells out homes in hours as rates fall
HONG KONG: Hong Kong's biggest property developer Sun Hung Kai Properties Ltd sold out the first batch of homes for a new project within hours, as the lowest mortgage rates in more than two years lured buyers.
Sun Hung Kai sold all 160 units in the 1B phase of Sierra Sea, a residential development in the Ma On Shan area, according to Centaline Property Agency.
A drop in interest rates is helping the city's residential sales, which saw an unprecedented downturn in the past few years. The one-month Hong Kong Interbank Offered Rate is hovering at 1.3%, the lowest since August 2022.
Sun Hung Kai may beat its HK$25 billion (US$3.2 billion) Hong Kong contracted sales target by 50% in the fiscal year ending in June, as mortgage rates drop for new-home buyers, Bloomberg Intelligence said in a note this week.
The city's effective mortgage rate linked to Hibor has dropped to 2.87%, the lowest in more than two years, according to mReferral Mortgage Brokerage Services.
Falling interest rates are positive for property companies, JPMorgan Chase & Co. analysts including Karl Chan wrote in a note on May 7. They estimate an average 5% earnings boost for every 100 basis point annualized decrease in financing costs from floating debt for the developers.
Meanwhile, the chances of Hong Kong's residential property market bottoming out are growing on the back of cheaper interest rates, according to Jefferies Financial Group Inc.
Hong Kong home prices are 29% below their peak in 2021, data from the government show. The number of households with negative equity - when the value of a property is less than the outstanding mortgage loan - rose to the highest since 2003 as of the end of March. - Bloomberg
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Star
32 minutes ago
- The Star
Military to unveil advanced weapons at World War II parade
The government will unveil a slate of new domestically produced military hardware that will showcase its 'powerful capability to prevail in modern war' at a parade next month, officials said. The event, marking 80 years since the end of World War II, will see President Xi Jinping inspect troops in Beijing's Tiananmen Square, with his Russian counterpart Vladimir Putin and other world leaders expected to attend. Millions of Chinese people were killed during a prolonged war with imperial Japan in the 1930s and 40s, which became part of a global conflict following Tokyo's attack on Pearl Harbor in 1941. The ruling Communist Party has held a series of blockbuster events in recent years to commemorate its wartime resistance. On Sept 3, China's military will showcase its latest equipment, 'reflecting the evolution of modern warfare', said Major General Wu Zeke, an official at China's military commission. 'All of the weapons and equipment taking part in this review were selected from domestically produced, currently active main battle systems, with a significant proportion being newly unveiled equipment,' Wu told reporters at a briefing yesterday. These will include strategic heavy weapons, hypersonic precision systems, as well as unmanned and counter-unmanned equipment making their first public debut, he added. The parade will 'fully showcase our military's powerful capability to prevail in modern war', Wu said. It will also feature ground troops marching in formation, armoured columns, aerial echelons and other high-tech fighting gear. The Kremlin has confirmed Putin will attend, and Chinese officials said other world leaders are also expected to take in the scene. China in March raised its defence spending for 2025 by 7.2%. The increase comes as Beijing's armed forces undergo rapid modernisation and eye deepening strategic competition with the United States. China has the world's second-largest military budget, but lags well behind the United States, its primary strategic rival. — AFP
The Star
33 minutes ago
- The Star
Push to ban online money games
The Indian government plans to ban online games played with money, a proposed Bill showed, in what would be a heavy blow for an industry that has attracted billions of dollars of foreign investment. The Promotion and Regulation of Online Gaming Bill 2025 says that no person 'shall offer, aid, abet, induce or otherwise indulge or engage in' the offering of online money games and such services, citing the psychological and financial harm it says can be caused by such games. The 13-page Bill describes an online money game as one played by a user by depositing money in expectation of winning monetary and other enrichment. The Indian market for such gaming is set to be worth US$3.6bil (RM15.1bil) by 2029, venture capital firm Lumikai says. Endorsements by top Indian cricketers and other marketing efforts have boosted appeal and investor interest of real money gaming apps such as the popular fantasy cricket games operated by startups Dream11 and Mobile Premier League. Dream11 commands a valuation of US$8bil (RM33.7bil) while Mobile Premier League is valued at US$2.5bil (RM10.5bil), PitchBook data shows. The Indian government has long been concerned about how such games are addictive. In fantasy cricket games on Dream11, users create their teams by paying as little as 8 rupees (RM0.38), with a total prize pool of 1.2 million rupees (RM58,156). The apps become more popular during the Indian Premier League season, one of the world's most popular cricket tournaments. The Bill states that anyone who offers such money games could face a jail term of up to three years and a fine. 'Such games often use manipulative design features, addictive algorithms ... while promoting compulsive behaviour leading to financial ruin,' the Bill said. — Reuters
New Straits Times
41 minutes ago
- New Straits Times
Gamers feel the pain: PS5 price jumps RM211 in wake of Trump's tariff war
SAN FRANCISCO: Sony on Wednesday said it is bumping up the price of PlayStation 5 video game consoles by US$50 (about RM211) in the United States due to a "challenging economic environment." Tariffs imposed by President Donald Trump hike the cost of goods brought into the US, leaving companies like Japan's Sony to decide whether to pass that on to consumers. "Similar to many global businesses, we continue to navigate a challenging economic environment," Sony Interactive Entertainment vice president of global marketing Isabelle Tomatis said in a post. After initially being threatened with a 25 per cent hike, Japan negotiated a 15 per cent tariff with the Trump administration. "As a result, we've made the difficult decision to increase the recommended retail price for PlayStation 5 consoles in the US." The new price for PS5 will be US$550 (about RM2,324), with a "Digital Edition" priced at US$500 (about RM2,113) and a Pro version for US$750 (about RM3,169), according to Tomatis. In May, Sony warned it was considering tweaking prices in the US, estimating that tariffs could wind up costing the company about US$680 million (about RM2.87 billion) in the fiscal year. American companies are feeling the crunch, too. New York-based cosmetics giant Estee Lauder recently estimated the impact of the new tariffs at around US$100 million (about RM422.6 million) for the 2026 financial year and plans to adjust its prices to offset the additional cost. US snack giant PepsiCo could increase prices of its soft drinks about 10 per cent to mitigate effects of US tariffs, particularly those on imported aluminium used to make soda cans, according to trade magazine Beverage Digest. Meanwhile, California-based energy drink maker Monster Beverages is considering raising prices due to a "complex and dynamic customs landscape," according to chief executive Hilton Schlosberg. The Commerce Department this week said the US broadened its steel and aluminum tariffs, impacting hundreds more products that contain both metals such as child seats, tableware and heavy equipment. Since returning to the presidency, Trump has imposed tariffs on almost all US trading partners. Though the impact of Trump's tariffs on consumer prices has been limited so far, economists warn that their full effects are yet to be seen. Some businesses have coped by bringing forward purchases of products they expected will encounter tariffs. Others have passed on additional costs to their consumers, or absorbed a part of the fresh tariff burden.--AFP
