Hong Kong property developer Hang Lung Properties wrote a cautiously optimistic note on the financial hub's housing market this year amid a quarantine-free travel resumption with the Chinese mainland.
Hang Lung chief financial officer Kenneth Chiu Ka-kuiChiu Ka-kui said during a news conference on Tuesday that he is not too worried about the external economies hammering housing prices, given three factors - border reopening, the city's healthy average income level and a fallback in the one-month cost of borrowing.
Chiu noted that the travel curbs between the mainland and Hong Kong are expected to increase demand for Hong Kong homes from mainland residents.
Weber Lo Wai-pakLo Wai-pak predicted that Hong Kong's housing market will develop steadily this year, with room for a slight rise in prices. He believes residential demand still exists after the sector went through a painful reset in the second half of 2021.
A rising interest rate, COVID 19 curbs, coupled with a dwindling number of potential buyers, has dealt a blow to the world's hottest property market in the past few months. According to the latest data released by the Rating and Valuation Department, the index tracking live-in home prices in Hong Kong went down by 15.6 percent year-on-year in 2022.
The underlying profit of Hang Lung declined by 4 percent year-on-year to HK $4.2 billion $535.9 million last year, while total revenue was flat at HK $10.35 billion.
ALSO READ: Property sales in Hong Kong fell 49.6% year-on-year in December.
Rental income from property went down by 3 percent year-on-year to HK $10.03 billion, while property sales rose to HK $316 million from zero a year ago.
Chairman Ronnie Chan Chi-chung said the company is mainly engaged in commercial building leases on the mainland, and Hong Kong's residential property is no longer the main business.
He said that the Hong Kong property market's impact on the company is not so important.
Hang Lung has a portfolio of commercial properties in Hong Kong, including the Hang Lung Centre and Fashion Walk in Causeway Bay. It owns 11 office and retail projects in Shanghai, Shenyang, Jinan, Wuxi, Dalian and Tianjin on the mainland.
Lo said the company plans to focus on high-end residential projects in Hong Kong in the future.
The dividend of Hang Lung Properties remained flat for the last year at 78 HK cents per share. Its Hong Kong stock closed at HK $14.76, down about 5.3 percent on Tuesday.