Motong expects property prices to rise by half in the second half of the year
The Government has introduced six new housing policy measures, including levying a vacant tax on first-hand flats, decoupling housing pricing from market prices, and some private residential land for public housing. JP Morgan Chase has expected vacant tax rate to be 5% of property prices. It is easy for developers to pass the tax on to the buyers and maintain the forecast of the overall increase in property prices this year.
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Liang Qichen, co-director of the JP Morgan Asia Pacific (excluding Japan) research department and head of Hong Kong stocks and real estate research in Asia, said yesterday that property prices in Hong Kong have not shown signs of peaking. The forecast to maintain a 15% increase in overall property prices this year has risen 11% in the first half of the year. In the second half of the year, it will rise by 4% to 5%, which is lower than the first half of the year, mainly due to the higher base in the second half of last year. Under the new housing policy measures, if the supply of private housing is not helped, or even the supply is reduced, the increase in property prices in the second half of the year will exceed the forecast.
Mr Leung pointed out that the Government intends to adjust the proportion of public and private housing from June 4 to 73. Whether private supply will decrease at that time will depend on whether the community has a consensus to increase land supply after completion of land supply consultation at the end of this year. He said that at the current stage of the economic cycle, the Government’s suppression of property prices is unlikely to be effective. The past increase in taxes and the suppression of demand measures have all contributed to the escalation of property prices. Therefore, the authorities have started to increase supply.
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The Government’s levy of vacant tax is considered to be a “cutting" to developers. However, the industry generally expects that the impact will be limited. Mr LEUNG Kai-kwai also considers that vacant tax is not tightening control measures and most properties will not touch new tax. Developers mainly consider funding. If you return to the cage or push the plate to find goods, such as rotation, unless the location is rare, it will be sold slowly.
Mr Leung said that at present, individual property stocks are still “buy". Under the reduced supply of land, the more developers holding more land reserves will benefit. Preferred Sino Land (00083), the company began to accelerate the absorption of land bank last year. The company has a net cash of about 21 billion yuan. It will launch 4 properties in the first quarter of next year. The estimated sales will reach 48 billion yuan, equivalent to the total sales in the past 4 years. After deducting the construction cost of 6 billion yuan, it can be returned to 420. With a fund of 100 million yuan, it is estimated that the company will hold 63 billion yuan in net cash in the next 12 months, accounting for more than 70% of its market value of about 83 billion yuan. The interest rate hike cycle is favorable to it and its defensiveness is extremely high.