Property curbs punishing top HK developers big time

Government not expected to scrap measures in next two years.

The combined contracted property sales of Hong Kong's four major developers plunged 39% on-year in the first half of 2013, said Phillips Securities. Taking the huge hit were Sun Hung Kai Properties, Cheung Kong, New World Development and Henderson Land Development.

The latest earnings reports from Hong Kong developers show government steps to rein in runaway property prices are hammering earnings. Among these steps are higher stamp duties for buyers and home loan curbs.

Sun Hung Kai Properties, Hong Kong’s largest developer, yesterday reported a 14% plunge in full year profits to US$2.4 billion, its first loss since 2005. The company, which has a market value of US$35.5 billion, is also the world’s second-largest developer by market value.

Analysts expect Cheung Kong and Sun Hung Kai to miss full-year sales targets as the Hong Kong government under Chief Executive Leung Chun-ying shows no signs of relaxing its punishing curbs.

Leung said on Wednesday that the city had no plans of easing recent property countermeasures considering the looming risk of a real estate market bubble. He noted that home prices rose an average of 0.4% between March and July.