In recent days, the central government has frequently recruited companies to supervise technology, education, and domestic real estate companies. It has also proposed "common prosperity" to narrow the gap between the rich and the poor.
It seems that the concept of "common prosperity" has reached Hong Kong recently!
According to foreign news sources, the central government requires Hong Kong real estate tycoons to "abide by the rules", use their resources and influence to safeguard national interests and help solve the housing shortage problem.
The news triggered a sharp drop in local real estate stocks. The market worried that developers might need to "contribute" agricultural land to help solve the housing problem. Therefore, Heng Land (0012), which holds the most agricultural land reserves, fell by more than 13%.
However, some analysts believe that the mainland will not copy the existing control measures to Hong Kong, and that even if the government reclaims agricultural land for development, it will still compensate. If the government further clarifies the future land policy, even if the developer's profit will be reduced, it may not be a bad thing. .
There is news that the central government has asked Hong Kong real estate tycoons to "obey the rules" in a closed-door meeting, use their resources and influence to safeguard national interests and help solve the housing shortage problem.
Last week, "Reuters" quoted news as saying that in a closed-door meeting, the central government asked Hong Kong real estate tycoons to "obey the rules", use their resources and influence to safeguard national interests and help solve the housing shortage problem. A source close to mainland officials also said They were told that "the rules of the game have changed," and that the Chinese government is no longer willing to tolerate "monopoly behavior."
The news triggered a sharp drop in local real estate stocks. Henderson Land (0012), New World (0017) and SHKP (0016) seldom became the top three blue chips with the largest declines, falling by 13% to 10% respectively; Cheung Kong (1113) also Fell 9%.
Xie Qicong, Director of Bank of Communications International (Real Estate Research), accepted an interview with "Hong Kong 01" that the central government may have identified the housing problem as one of the causes of social unrest in recent years.
Xie Qicong believes that the government's recovery of agricultural land will damage developers' profits, and that market conditions have caused the stock price to plummet, (provided by interviewee)
The housing problem is a "historical problem"
However, Xie Qicong pointed out that the housing problem in Hong Kong is a "historical problem." "From the age of Hong Kong and the British to Yijia, it is not a mistake to talk about the (housing) system to solve the problem." Medium-term housing measures to increase housing supply have also achieved certain results.
The current Chief Executive, Carrie Lam, is more inclined to refer to Singapore’s practices to increase the proportion of public housing. However, her proposed "Lantau Tomorrow" has not been implemented and the land supply problem in the next five to ten years has not been resolved, because it seems that only country parks and agricultural land are developed. This is the most effective option to release a large amount of land. "Although the containers are placed on the brownfields, there are no rocks, but after you take them back, the containers will have to be placed, which will affect the logistics industry at that time."
Large developers hold approximately 1,000 hectares of agricultural land
Even if the government is determined to "appoint" the development of country park land, it still has to deal with it through amendments to laws and other means, and public opinion is not just a case of support.
Perhaps the easiest to deal with is indeed farmland in the hands of developers.
Since the 1980s, local developers have bought New Territories agricultural land in Hong Kong at low prices. According to industry statistics, there are currently about 8,300 hectares of general agricultural land in Hong Kong, of which government and private land account for 4,900 hectares; Of large developers.
It occupies about 1,000 hectares (about 100 million square feet).
Based on the annual reports and market news of major developers, Henderson Land has the largest amount of agricultural land, with about 45 million square feet; Xindi has about 30 million square feet of agricultural land; New World has more than 16 million square feet; It actually owns about 13 million square feet; Wheelock management has disclosed that the group also owns about 4 to 5 million square feet of farmland.
Xie Qicong believes that the market is most worried about or that developers will be "trapped away from the farmland" by the government, which in turn will damage their interests.
It is difficult to return farmland to build houses under the current interest system
To develop agricultural land, the fastest way is to use the government’s "Sword of Prestige", that is, to use the "Land Resumption Ordinance" to recover private land. In fact, the government has cited the Ordinance four times in the past three months. land.
Xie Qicong said with a smile that I believe that some developers who hold more agricultural land reserves, such as Henderson Land and New World, all hope to accelerate the development of agricultural land, but under the current system they have not been able to achieve their wishes. "The government is unable to do so. He (the developer) has not been able to do it either."
But if the government is "required" by the central government, it should be good for real estate stocks if the government speeds up its development?
He believes that the market is most worried or that developers will be "trapped away from the agricultural land" by the government, which will damage their interests. In addition to the recent stock market deterioration, "other sectors have fallen, like Li Ning has fallen by 8%." But he believes that the government Even if the land is recovered, there will be compensation to the developer, but the relevant profit will be less than that of the real estate developer’s own development. Private developers are involved in the construction of public housing."
As for market concerns, the central government will move the mainland's measures to regulate real estate to Hong Kong.
Xie Qicong believes that in recent years, the central government’s control measures have begun to refer to Hong Kong, using methods such as capital restrictions and mortgages. The effect is better than price restrictions and sales restrictions. Therefore, he estimates that the opportunity is not great. The market is not watching, everyone is going first."
Huang Minshuo believes that the market is worried that under the "common prosperity" policy, local real estate developers need to cooperate and are more likely to move a set of mainland property market control measures to Hong Kong.
Huang Minshuo, director and chief investment officer of Baoju Securities, also believes that the market is worried that under the "common prosperity" policy, local real estate developers need to cooperate, and it is more likely that a set of mainland property market control measures will be moved to Hong Kong.
However, he believes that in addition to residential properties, many developers in Hong Kong also have investment properties. Even if the profits of the residential buildings are reduced, they "may not be completely unilaterally (business) affected."
Xie Qiicong: "It is worth looking at real estate stocks"
Speaking of the sharp decline of many real estate stocks today, Xie Qicong believes that investors are “worth watching” because the stock price has fallen sharply. If it proves that the news is “thunder and less rain,” or more practical measures will be announced later , Such as strengthening the land use mechanism in the future.
Although the profit margin will be narrowed, it is not a bad thing and may have a positive impact on the stock price.
Huang Minshuo also pointed out that New World has invested resources in the development of commercial and other non-residential businesses in recent years and has taken a diversified route; Hysan has also begun to enter the mainland market. On the other hand, Hang Lung has also focused on the development of the mainland in recent years. It is recommended that retail investors should pay more attention to the above. Shares, take advantage of the falling market to buy.
