Small, Medium Developers Out of Competition in Hong Kong
According to JLL's Residential Sales Market Monitor for June 2017, small-to-medium sized developers in Hong Kong are likely to lose their competitiveness in land market under the Hong Kong Monetary Authority's (HKMA) new loan-to-value measures. Going forward, the share of residential sites acquired by small-to-medium developers via government tender could reduce from the 48% recorded in 2016. The government's regular land sale system had been providing small-to-medium sized developers with more opportunities to participate in the city's residential development landscape. These developers accounted for 48% of the number of residential sites sold in 2016, double the 24% recorded in 2011. However, this could change, following HKMA's tightening measures on site and construction financing in May 2017. The People's Republic of China developers (PRC developers) remained aggressive in land acquisition under the measures, maintaining their winning streak in the residential land sales market this year. Local heavyweights will also unlikely be affected given their relatively stronger cash positions and financing sources at the group level.
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