Chapter 581 [Counterattack from the Hong Kong Government]
May 26.
The Hong Kong government auctioned two plots of land in the first phase of the new fiscal year. The first plot is located in Luen Wo Hui, Fanling, with a reserve price of HK$1.8 billion. Based on market conditions, the media predicts that the transaction price will be between HK$2.8 and 3 billion; the second plot is located in Organ Street, Yuen Long.
The starting price is HK$480 million, and the expected transaction price is HK$700-800 million.
The expected transaction price is naturally a rough estimate based on past experience, but everything depends on the outcome of the auction. Most industry insiders predict that the transaction price will be 20% to 30% higher than the government's reserve price.
The auction result was "a surprise", as it was sold at a price slightly higher than the reserve price in a non-competitive atmosphere.
A piece of land in Fanling was sold for HK$2.04 billion, which was much lower than the expected HK$2.8-3 billion;
A piece of land in Yuen Long was sold for HK$510 million, which was more than 30% lower than the expected price of HK$700-800 million.
As the news spread, the stock market suddenly went into a selloff, with real estate stocks falling the most.
Major newspapers in Hong Kong reported on the matter one after another, and the "inside story" gradually "came out".
According to the "facts" disclosed, Hong Kong's major Chinese businessmen and British-owned real estate developers "gathered" in the coffee shop on the eve of the auction, including Chang Shi's Zhou Xianmao, New Era's Liang Zhenxun, New World's Guo Bingjiang and Chen Juyuan, New World's Leung Chi-kin
, Hengji Wenwenyi, Hang Lung Chen Qizong and Yuan Weiliang, Swire Properties Jian Jifu...
People suspected that the developers had "considered" the situation before the auction, but they later claimed that they had only held a meeting on the affairs of the Real Estate Chamber of Commerce.
Some people still have doubts about this. Auction bidding is like a battle. On the eve of the auction, every house enters a state of war. How can this "leisure and leisure" be discussed on matters that have nothing to do with the auction?
At the beginning of the auction that day, the auctioneer opened the bid at HK$1.8 billion (for a piece of land in Fanling), adding HK$2,000 to each bid. No buyer accepted the bid for 8 minutes after the bidding started. In the auction room, no one accepted the bid. 8
The word "long" can be used for minutes. Afterwards, Nan Fung was the first to undertake the bidding, Baoli bid, and then New World bid to HK$1.98 billion. Several major bidding consortiums, "Ear Biters", were extremely busy. During the bidding process, various consortiums
The grand alliance was finally completed, and Nan Fung finally came forward to bid for HK$2.04 billion.
There are 13 developers who have bought this land, including Cheung Kong, Nan Fung, New Era, New World, SHKP, Sino, Kerry, Hang Lung, Henderson, Swire, Peribo, Development Bank of Singapore, and China Overseas.
Among them, Dagu is British-owned; Sino, Kerry, and Development Bank of Singapore are Hong Kong companies owned by overseas Chinese in Southeast Asia; Huaxia Overseas is Chinese-owned and is affiliated to the Ministry of Construction of China.
It is said that the total investment in the entire development plan is approximately HK$3 billion, with Cheung Kong serving as the project manager.
The second land auction in Yuen Long was simply a replica of the first land. The starting price was HK$480 million, with each lot priced at HK$1,000. After only three calls, the auction went completely cold. The auctioneer had to settle for HK$510 million. The consortium for the second land auction
The number of combinations is even greater, reaching 15. In addition to the 13 consortiums mentioned above, Zhuangshi Enterprises and Guang Sang Hong are also happy to join.
Reporters and "observers" who attended the auction immediately started talking about it.
Some people think that this is a gesture by the developers to the Hong Kong government, not to use tough measures to cool down the property market, otherwise it will affect the income from land sales; others are worried that the monopoly of developers can make astonishing profits by buying land at low prices.
On May 27, "Ta Kung Pao" published an editorial. The editorial said:
"It can be said that this is a rare neglected situation in the auction house in recent years. In the past, most of the bidding was fierce and hit new highs repeatedly... In fact, the (official land) land price suddenly plummeted by 1/3, which is not a blessing to the overall economy of Hong Kong after all.
. Take the reaction to the land sale on May 26 as an example. The stock market was the first to be affected. Real estate stocks plummeted and investors were at a loss...
The land price is too high and needs to be repaid; the property price is too expensive and out of touch with the people's purchasing power, so adjustments need to be made. This is the consensus of everyone, and we hope to see this situation emerge in an orderly, gentle and slow manner, and
A sudden rise was followed by a sharp fall. The land sales on May 26 were the product of special circumstances and factors and should not be taken as the standard. Otherwise, it would increase the instability of Hong Kong's economy and be detrimental to a smooth transition...
Many people have objections to the practice of developers joining hands to invest in land during the land sale on May 26. This does not mean that developers are not allowed to form consortiums to purchase land, but that a disguised monopoly cannot occur. If this is the case,
It is no longer a fair market.
"Zijia" magazine said: "Before the 1970s, real estate developers often cooperated to invest in land in Hong Kong's official land auctions... With the institutionalization of the official land auction system and payment terms, and the self-discipline of real estate developers, those in the past
This method of jointly lowering prices and sharing profits privately is no longer seen. The old tactics were repeated this time, which aroused fierce criticism from the public."
According to market analysts, in the past six months or so, the Hong Kong government has continued to tighten restrictions on the purchase and sale of buildings. The property market has dropped 15% from the beginning of the year. The stabilization of property prices has been effective. Homebuyers welcome it, but real estate developers are unhappy about it, so they have joined forces to lower land prices.
Demonstrate to the Hong Kong government and don’t push forward every step of the way.
Others believe that if real estate developers join forces to monopolize land prices, the government's treasury revenue will be reduced. The government's money has to be spent in Hong Kong, and London cannot get a cent. It is not advisable for real estate developers to sacrifice government treasury revenue.
Some people also believe that real estate developers are "holding flat goods" and will not "buy and sell at the same level". Homebuyers can't even hope to buy flat buildings. Real estate developers lower land prices just to obtain more astonishing profits.
Words of criticism and condemnation are pouring in at real estate developers from all directions.
This group of real estate developers had just "exchanged fire" with the Hong Kong government and "won a great victory", but not a single cheer was heard.
They were immediately placed in an "isolated" situation in Hong Kong, which they did not expect.
Leung Chi-kin, spokesman for the Hong Kong Real Estate Developers Association and general manager of New World Development, said: "Recently, the real estate developers joined forces to buy land, and it was not premeditated to lower the land price. On that day, eight minutes after the auctioneer opened the bid, no one took the price, which made the developers
They were worried that if the government took back the land, it would affect land prices in the future, so they decided to jointly bid."
This chapter is not over yet, please click on the next page to continue reading! "No one responded after 8 minutes, and the developers were surprised. Now the property market is quiet, with property prices falling by more than 10% in the past two months, and the government is about to announce
With measures to curb property prices, developers cannot see the market outlook, so they join forces to bid to reduce risks."
Leung Chi-kin also stated: "Not every real estate developer can spend billions of Hong Kong dollars to invest in this project. Only by uniting multiple companies for joint development. Real estate developers are indeed sincere in cooperating with the government to combat the trend of property speculation."
Some analysts believe that Liang's explanation is not convincing. Including New World, at least seven or eight companies have independent financial resources to develop this project. Moreover, they can sell off-the-plan properties instead of existing ones; they do not need to take it out all at once, but can
Development in stages over many years.
"Ming Pao" reported: "After attending a ceremony on May 28, New World Development Chairman Cheng Yu-tung denied that the real estate developers had joined forces to lower land prices, and said that the land prices reflected that the developers were only diversifying investment risks."
Li Chaoren, chairman of Cheung Kong Holdings, attended the China Real Estate Exhibition on May 28 and emphasized to the reporters present: "There is absolutely no such thing as a demonstration against the Hong Kong government." He also said: "Under the current circumstances, everyone shares a small risk. This is
That’s my opinion.”
However, market participants do not agree with Li Chaoren's words.
During the real estate downturn in Hong Kong in "1968" and "1983", Superman still dared to take advantage of others and took risks to acquire large amounts of land. On the auction floor, Superman's "finger to the sky" was even more famous.
Therefore, some analysts believe that Superman's cautious behavior is puzzling and inconsistent with Cheung Kong's tens of billions of cash reserves.
It is said that Li Chaoren, who has a "smooth" life, has instructed Cheung Kong director Zhou Mao to resign as the project manager of the two land parcels to avoid market accusations that Cheung Kong is taking the lead in "confronting" the government.
Lin Zuhui was also surrounded by reporters at an event to cover this topic. He said calmly: "At present, all major developers are willing to cooperate with the government to crack down on the property market. It is not appropriate to chase high land investment, so everyone is diversifying their investments. Real estate adjustment
It is inevitable and this situation is conducive to those who are in urgent need of buying a home.”
According to media analysis, Lin Zuhui's family has a big business, but judging from his attitude and behavior, it seems that he does not care much about real estate profits; the New Era Group's joining this time is just taking advantage of the trend.
........
On June 2, the Hong Kong government, which had lost both its "silver paper" and its "face", launched more severe measures to combat speculation:
Medium- and long-term measures: Plans to increase land supply and increase the supply of "medium-priced" units in public housing and private buildings within a few years to ensure the stability of the property market.
Measures in the first phase include: reducing internal subscription from 50% to 10%; selling off-the-plan properties from the current 2 years before moving in to 6-9 months before moving in; and increasing the deposit for buying a property from the current 5%
to 10%, etc.
Relevant officials from the Hong Kong government said that the reduction of government tax revenue is not the most important consideration. The most important thing is to enable ordinary citizens to buy ideal units.
Hong Kong real estate developers "assessed the situation" and wisely issued a statement expressing "in principle agreement" with the Hong Kong government's measures to combat speculation.
Spokesperson of the Hong Kong Real Estate Developers Association and General Manager of New World Development Leung Chi-kin expressed support in principle for the Hong Kong government’s measures to curb property prices, and believed that the measures can effectively prevent speculators from entering the market. However, it was only after the measures to shorten the time for selling properties and restrict buyers from signing contracts that they
Resale properties are reserved.
He said: "The measures announced this time are very comprehensive, including short-term measures to combat speculators entering the market, curb property prices, and long-term measures to increase land supply, which can alleviate the tight housing demand in Hong Kong. The Real Estate Development Association will try its best to
Cooperate with the government to comply with and implement the announced measures.”
After the implementation of the measures, speculation in the Hong Kong property market gradually subsided and property prices fell.
Users are happy, speculators are unhappy, and developers are mostly pessimistic.
.......
In the conference room of New Era Group, Lin Zuhui summoned some senior executives to formulate a new strategy.
Lin Zuhui said: "We can still purchase official land at auction, but it should not be too prominent. It will be enough if we can secure the four major development real estate developers in Hong Kong and maintain a stable land bank."
He doesn't often participate in official land auctions now, so I would like to remind everyone. Of course, before every official land auction, he must have detailed information and plans, and will communicate with Chen Bin and others.
Chen Bin nodded and said, "Okay, I understand what the boss means."
Everyone agreed and understood the boss's attitude. New Era Group now has a large proportion of comprehensive investments and is no longer a pure development real estate developer.
Lin Zuhui added: "Although housing has fallen by 15% this year compared to the beginning of the year, market transactions will not encounter a severe cold immediately. The sales department must seize the opportunity to sell properties and not drive prices down further. However, they can carry out some promotional activities, such as giving away gold through lottery draws.
European and American tourism... In short, we need to put more effort into selling, but we should not take the lead in lowering prices."
This so-called price reduction means "not to withstand the bad market". Whatever the price of the surrounding properties is, that is the price, and we should not engage in vicious competition.
Chen Xiaofen said: "Okay, we must put more thought into it and work hard to sell."
Lin Zuhui nodded and said to everyone: "Actually, even if New Era Group's sales are poor during this adjustment period, the impact on the group will not be particularly large. And I always believe that this adjustment is caused by internal challenges, far from
External factors are so deterrent. Therefore, once the adjustment period is over, housing prices will rise again, which is why I am not in a hurry."
Everyone has always been very positive about their boss's analysis.
Liang Zhenxun nodded and said, "There is no financial problem!"
Although the boss has arranged another 5 billion Hong Kong dollars in stock investments, out of trust in the boss, Liang Zhenxun believes that these investments will have very considerable profits. For example, the US stocks he invested in have made about 10% profit this year, and the total market value has
1 billion US dollars (total investment 450 million US dollars).
In addition, the company will still have a lot of profits this year, and it is not impossible to save 8 billion to 10 billion by the end of the year.
Soon, everyone knew how it would develop in the next year or so.