The social violence has continued
Property agents estimate that the registration of building sales contracts in August will be reduced by 45% from this year’s high. The market saw second-hand price reductions for sale, and local real estate stocks, Xinhe Real Estate (00083) shares fell more than 3%. Moto estimates that trade wars, local economic downturns and social events, property prices fell by up to 30% in the worst case, but this price decline is not the bank’s basic assumptions. In the first half of August, visitors to Hong Kong decreased by 30%, and Shangri-La (00069) shares fell by 3%. In addition, the Hang Seng Index fell 98 points yesterday.
A total of eight second-hand sales cases were recorded in the Top Ten Indicators Estates last weekend, which was the highest in the past 14 weeks, mainly driven by the increase in price reduction cases. The number of registrations for building sales and purchase contracts in August is estimated to decrease by 15% month-on-month, which is 45% lower than this year’s high. In the meantime, the number of second-hand private residential transactions in August is expected to decrease by 7%. On the other hand, the number of mortgage registrations in the current building in August has reached an August high.
The current price has not yet reflected the worst case
The mortgage registration of the current building has exceeded 9,000 for four consecutive months, failing to alleviate the pressure on property stocks. Venture capital accelerated the reduction of real estate stocks, Sino Land’s share price fell 3.3% to 10.82 yuan; New World (00017) shares fell 1.3% to 9.65 yuan. Sun Hung Kai Properties (00016), which holds a large number of rented properties, fell 2.7% to HK$108. The share price of purely rented shares in Wharf Real Estate (01997) fell 2.3% to 41.45.
In July, Moto, which maintained a 10% increase in local property prices this year, published the latest property market views. Motong pointed out that although the stock price of real estate stocks has been adjusted by 19% since the high level, the current price has not fully reflected the impact of the Sino-US trade war and local political events on the economy. Moto said that if the social movement continues, the worst case of local property prices will fall by 30%; office rents may fall by 40%, but it is not the basic assumption of the bank that this price decline scenario is emphasized.
Moto lowered the target price of local property stocks and lowered the investment rating of Wharf Property, Swire Properties (01972), Sino Land and Hysan Industrial (00014) to “Reduce”; maintaining Cheung Kong Group (01113) and Henderson Land (00012), New World Development (00017) and Link Real Estate (00823) “overweight” rating. According to Morton, it is assumed that residential property prices and retail rents also fell by 30%, while office rents fell by 40%. Among many property stocks, Xindi is one of the least affected stocks.
Visiting Hong Kong and reducing hotel stocks
Guo Qilun, chief analyst of Shide Financial Strategy Research Department, said that the assumption of a 30% decline in residential property prices is quite exaggerated, and the potential adjustment range of 15% to 20% is more reasonable. Although the ongoing social events have pressure on property prices, only property prices have fallen to a certain level, which is expected to attract foreign funds to enter the market. Guo Qilun continued that the rent-receiving market will perform poorly in the next one or two quarters. The current price of rent-collecting stocks will not be low, and the fastest time to wait for the society to recover calmly, and retail sales have signs of recovery, and then absorb them in stages.
As for the overall market, the Hang Seng Index fell 98 points yesterday to 5626 points; the HSCEI rose 20 points against the market, reporting 10103 points. Main board turnover has shrunk by 22% to $67.8 billion. The performance of other individual stocks showed that the number of visitors to Hong Kong fell by 4.8% year-on-year in July. The number of visitors to Hong Kong fell by about 30% in the first half of August. Hotel stocks down, Huada Hotel (00201) shares fell 6% to 0.141 yuan; Shangri-La shares fell 3.6%, to 7.89 yuan; Langham (01270) shares fell 3%, reported 2.24 yuan