Sheng Zhiwen: Hong Kong property market to return to normal in 2 years

Chief Executive Lee Ka Chiu will deliver his first policy address on Wednesday (19 October). Attention is being paid to whether the Hong Kong government will announce the removal or relaxation of the housing market control measures and the relaxation of the quarantine measures for overseas arrivals to “0+0”. Dr. Allan Zeman, Chairman of Lan Kwai Fong Group, known as “The father of Lan Kwai Fong” and a prominent economic and social figure, said in an interview that the Hong Kong government’s “0+0” quarantine measure would not only stimulate the overall economy, but also stabilize the property market by attracting mainland and overseas buyers to Hong Kong, but it will take two years for the property market to fully recover.

Allan Zeman, former Chairman of Ocean Park and a naturalized Chinese citizen, is of Jewish descent. Apart from being a celebrity, Allan Zeman has been described as a business-savvy businessman whose businesses have made a big push into Hong Kong’s property market in recent years.

Looking at the trend of the real estate market, Allan Zeman believed that due to the Hong Kong dollar’s peg to the US dollar, the current successive interest rate hikes in the US have indeed added pressure to the Hong Kong property market, increasing the burden on housing buyers, and causing property prices adjustments. “For the foreseeable future, the Hong Kong property market is still in a downward trend, and a real recovery will take two years,” he said. “It is difficult to predict the decline of property prices in Hong Kong as the property market is affected by different external factors, such as global economic performance,” he added.

“0+3” measure only facilitates Hong Kong people to return to Hong Kong, but plays a limited role in reviving the economy

The focus this week will be Chief Executive Lee Ka Chiu’s policy address. As to whether the Hong Kong government will further relax the quarantine arrangement for people entering Hong Kong from overseas to “0+0”, Allan Zeman pointed out that the current “0+3” quarantine arrangement only facilitates Hong Kong people returning from overseas and does not provide much incentive for overseas travellers.

He said that if the Hong Kong government could implement the “0+0” quarantine measure, it would not only benefit the overall economic development, but also attract people from the mainland and overseas to buy property in Hong Kong again, which would lead to the stabilization of the property market and even the rise of property prices. According to market estimates, the Hong Kong government is considering refunding Buyer Stamp Duty (BSD) to non-local property buyers. Allan Zeman stated that the relevant measures are positive for the property market.

The Hong Kong Government should simplify the land development process

Allan Zeman stressed the continuing shortage of housing supply and remained optimistic about the long-term market ahead. As for the promotion, the Group completed the land premium in Ho Chung, Sai Kung last year, which is the Group’s first residential development in Hong Kong. However, he said that residential development in Hong Kong will take a longer time. For example, the Ho Chung project in Sai Kung will take several years due to land premium, approval, and other issues. Therefore, he suggested that the Hong Kong Government should consider simplifying the land development process.

In fact, Lan Kwai Fong Group has extensive experience in residential development. Aquella, a luxury property developed in Thailand, has won multiple awards, including the Best Luxury Housing Architectural Design (Resort) in PropertyGuru Asia Property Awards 2019. Allan Zeman considered that Sai Kung has a beautiful environment similar to rural areas abroad. He hoped to bring the same elements of the Thai luxury development and design to the Sai Kung project.

Bringing the Thai luxury design elements to the Sai Kung project

The Sai Kung project consists of 26 houses with a usable area of 2,500 to 3,000 square feet, each with a garden. With plenty of green space, the project is now scheduled to launch in 2025 at an affordable price.

In addition to the Sai Kung luxury project, Allan Zeman revealed that Lan Kwai Fong Group intends to develop one or two more residential projects in Hong Kong and will bid for projects that have all the right elements. For example, the Lan Kwai Fong Group had earlier submitted an expression of interest to Urban Development Authority for Xianjuli project, Queen’s Road West, Sai Ying Pun.

Read the full article in Mandarin at盛智文-港樓市完全復常須兩年-「0-0」可吸引內地及境外客來港置業