Asia Property Market Update Issue 107 | March 2010 Asia Property Market Update | March 2010 A monthly e-newsletter bringing you the latest information from major markets in the region Bangkok Incentives' end could boost big developers The government's property tax incentives are due to expire on 26 March this year and the cabinet has decided there will be no extension. The market share of the top eight developers rose to 49% last year from 34% in 2008. The current policy aims to stimulate the domestic property market by cutting the special business tax from 3.3% to 0.1% and transfer and mortgage fees to 0.01%. The scheme was extended last year after being launched in 2008. The number of residential units launched last year was 57,604, down from 67,791 units in 2008. The number of units sold dropped to 59,085 last year, down from 65,653 in 2008. Buyer sentiment in the first two months of this year has picked up. Shaking off the blues in Phuket After a miserable economic year globally, Phuket shook off the blues with the launch of Andara Resort & Residences over the Chinese New Year weekend, drawing glitterati from all corners of the world that enjoyed a spectacular party complete with dancers, fire-eaters and fireworks. While the majority of Andara's buyers are from Hong Kong, others come from various parts of the world including the UK, Russia, Scandinavia and Taiwan. Although the price tags of a luxurious project like Andara would astound the average Thai, with an apartment starting at 27 million baht and a villa at 150 million baht, they are low by Hong Kong standards. It is likely that mainland Chinese will eventually also start coming to Phuket and turn it into a strong buyers' market. Contact | Mr HENG Hua-thong Phone | +662 257 0499 E-mail | [email protected] Beijing Beijing announces 11 new housing policies and takes out expired preferential ones On 21 February 2010, Beijing Municipal Commission of Housing and Urban-Rural Development released the “Opinions on the implementation of real estate market policies to ensure healthy and stable development”. With the aim of ensuring healthy real estate market development, the five core opinions mentioned include constructing more guaranteed housing, increasing land supply for ordinary commodity housing, terminating the expired preferential policies, enhancing the management of commodity house sales and monitoring real estate market and law enforcement procedures. In line with the modified control policies set by the central government, the supply of new homes in January 2010 was up compared to a month ago, while speculative purchase and housing prices started to slow down. Beijing sells seven land sites for RMB9 billion at the first auction in the year of the Tiger On 24 February 2010, Beijing sold seven out of nine plots for RMB9.01 billion. The most attractive plot was the one located in Changying Village, Chaoyang District, with an initial bidding price of RMB1.7 billion. On the first round of the land auction, Beijing Tongrui Wanhua Property Ltd, a subsidiary of Longfor Properties, purchased the plot for RMB4.54 billion. This was the first time that did not involve the bid assessment committee but sold the land to the highest bidder. Contact | Mr Edmund H K HO Phone | +86 10 6510 1388 E-mail | [email protected] Chengdu Chengdu Metro to support home prices The construction of the Chengdu Metro Line 1 is in full steam according to media reports. Line 1, which will become Chengdu’s first metro line, will open to the public for a trial run on 1 October 2010. It is thought that the metro will fundamentally change the residential map of Chengdu, with projects connected to the - 1 - This publication represents only a brief summary of information received from many outside sources and no guarantee can therefore be given by DTZ or any of its employees as to its accuracy. Please refer to original source or seek more detailed advice from the firm before relying on any statements made. Asia Property Market Update | March 2010 metro expected to enjoy stable development in prices, despite uncertainties in the Mainland residential market. Contact | Mr David P Y CHO Phone | +86 28 8665 3048 E-mail | [email protected] Chongqing Chongqing listed as one of the five major cities in China for first time Chongqing’s Management for Construction Planning and Civil Defense conference was held on 4 February 2010. According to the “National Urban System Plan” published by the Ministry of Housing and Urban-Rural Development of the People’s Republic of China, it was announced at the conference that Chongqing is listed as one of the five major cities in mainland China for first time. These cities must be the development lead, create major positive impacts on the region and facilitate the full spectrum of development of its surrounding areas, from political and economic areas to cultural aspects. Chongqing will become the major support for the development of Western China and the economic zone of the Yangtze River. Being listed as one of the major cities means that Chongqing will also become a National First Class transportation hub. Contact | Mr David P Y CHO Phone | +86 28 8665 3048 E-mail | [email protected] Dalian Zhuanghe Dadong Lake contract worth RMB3.5 billion Liaoning Province Zhuanghe City Planning Authority signed a contract with Dalian Sanlin Group to co-develop the project of Zhuanghe Dadong Lake. The project will become the largest infrastructure construction project in North-east China, located in the Nancheng District in Zhuanghe, totalling RMB3.5 billion. It is planned to build a multi-complex leisure district with entertainment, resort and commercial residential elements at the intersection of three rivers: Reshui River, Zhuanghe River and Baome River. The project leads Zhuanghe city to develop into a modern city that can accommodate upon completion one million people. Contact | Ms Betty X ZHAO Phone | +86 411 8886 5288 E-mail | [email protected] Guangzhou Changes in tax payment for industrial land The Guangzhou tax authority has announced a new classification system for industrial land tax payment, with the effect traced back to 1 January 2009. Previously, industrial land plots were classified into six categories according to their use, as stated on the land rights certificate. Each category comes with an annual tax payment ranging from RMB3 to RMB27 per sq m of the plot. The new system would have only five categories and the tax would range from RMB3 to RMB15 per sq m. Those who paid more tax in 2009 before the measure came into effect will be allowed to apply for a refund or use the refund as part of the new tax payment in the future. Tentative guidelines on resident consultation in renewal areas The Guangzhou government recently revealed a set of tentative guidelines on how to carry out consultation work with residents before developers can begin the revamping and renewal process in that area. According to the guidelines, developers must carry out two rounds of consultation among residents, explaining to them every detail of the relocation and compensation in a timely, comprehensive and active - 2 - This publication represents only a brief summary of information received from many outside sources and no guarantee can therefore be given by DTZ or any of its employees as to its accuracy. Please refer to original source or seek more detailed advice from the firm before relying on any statements made. Asia Property Market Update | March 2010 manner, and respect the residents' rights to know and participate in full in the consultation and relocation. The guidelines state that developers must obtain approval to revamp from at least 90% of the residents of one area in order to start the process and must complete registration accordingly. Contact | Mr Spencer Y S PANG Phone | +86 20 3877 0878 E-mail | [email protected] Hangzhou China Railway Construction purchase two residential plots in Gongshu District The state-owned enterprise, China Railway Construction Corporation Ltd (CRCC), purchased two residential plots in Hangzhou for RMB2.806 billion on the first land auction of 2010. Located in Hangzhou Qiche Fadongji Zhucao Chejian, Gongshu District, the two plots occupy a total site area of 148.4 mu and are adjacent to Binjiang Wanjaxing Town. After 13 rounds of bidding, CRCC purchased the first plot for RMB1.65 billion with a floor price of RMB11,685 per sq m. At the same time, the company also purchased the No. 2 plot for RMB1.156 billion with a floor price of RMB8,854 per sq m. Contact | Mr George T YEUNG Phone | +86 571 8577 9946 E-mail | [email protected] Hong Kong Government site sold for HKD3.37 billion On 22 February 2010, the Lands Department held the last land auction of the 2009-2010 financial year. A Government lot in Tseung Kwan O Area 66B was sold for HKD3.37 billion, which was 68.5% higher than the opening bid and matched the upper expectation of the market. The auction lasted for 22 minutes amid keen responses from developers who were confident with the market outlook. The lot measures 12,300 sq m and is designated for non-industrial purposes, with a GFA between 40,590 sq m and 67,650 sq m when completed. The sale means the government pocketed land revenue of about HKD32 billion this financial year, almost double the HKD16.5 billion that it projected in its budget forecast. RMLs in negative equity records quarterly drop of 44.5% at Q4 2009 The Hong Kong Monetary Authority announced on 1 Feb 2010 the results of its latest survey on residential mortgage loans (RMLs) in negative equity.