Final Project

Two Faces of Hong Kong in Financial Crisis

By Trista Lv

! Real Estate Market Warm Again

Subprime mortgage was condemned as the origin of the financial tsunami, its side-effect even bring a disaster to the A mortgage loan industry and real estate market. However, in Hong Kong apartments developers, service providers, mortgage companies and investors are waiting for another prosperous…

People are queuing for visit show flat. Photo by Trista Lv

! Unemployed Rate Keep Rising

As a highly opened market, Hong Kong is severely hurt by financial crisis. Many industries in Hong Kong has been damaged in recently. Unlike the wealthy people, most of Hong Kongers are struggling for life in the crisis..

nearly hundreds of salesmen gathering along the street trying hard for apartments promotion. Photo by Trista Lv

2.Real Estate Market Page

Real Estate Market Warm Again

By Trista Lv

Hong Kong，April 19th – IJS-GLOBAL-As other economically developed areas around the world, Hong Kong is the place where people can always find ways to earn money, even in the time of economic recession.

According to Savills, a real estate service company, the general housing price has increased over 20% in the first quarter this year. The price of luxury apartment has raised nearly 10% and the market price of super luxury apartments has raised 10% to 20% compare to the last 3 months of 2008.

“The real estate market of Hong Kong is comparatively mature and stable, it hasn’t changed greatly in the past few years,” James Tsang, a Hong Kong financial journalist who specialized in housing field, said. “After a quick decline of housing price last year, huge number of investors enter into the market, most of them believe that the market price wouldn’t fall again and they would make a lot of money from the property investment this time,” he explained.

Peter Yuen,SavillsSenior Director and Head of Investment and Sales (Hong Kong and Macao), said there are numbers of people with strong purchasing power in the property market now, they are looking for opportunities to purchase good properties.

“Low interest rate of Banks and unstable of stock market made investors change their target in the period of economic slowdown,’’ he said. “Besides, after over 20% drop in the 4th quarter last year, the price of real estate is very attractive now,” he added.

Jimmy Fony, Head of Residential Sales(Hong Kong), suggested his customers enter into real estate market at the end of last year. He believed as investors and end-users bought departments at low price, the general real estate market will stop declining and stared to rebound.

Like the service providers and owners of high-end properties, the developers of townhouses are also urging to this business opportunity. This period of the real estate market is called “Xiao yang chun” by Hong Kongers, which means the real estate market is entering into early spring again.

As lots of customers started to purchase the depreciating properties, the market began to warm again. According to local analysts, the market price will keep growing in the next two quarters and is expected to rebound to the peak of last year.

Many new and second-hand departments appeared on the market recently. Real estate ad is one of the most frequently seen ads recently.

On April 17, 6 local newspapers place advertisement of the same local real estate company on their front pages. No matter the housing is rural or urban area, customer react actively towards developers’ promotion.

Allen Go, a local financial journalist, said many developers adjourn their building when price shrinking severely last year. “Now the situation is better and the price in increasing again, they started to promote again, so you can see numerous housing ads now,” she cited.

Among the on sale departments, the central park tower in Tin Shui Wai, the Latitude in Kwun Tong and the Emerald Green in Yuen Long are the hottest properties this month.

The Latitude has received over 70,000 people to see the show flat, has sold over 400 apartments and earn over HK$3 billion (over US$ 22.8 billion) in 2 days. According to the salesman, nearly half of the buyers are investors.

Tifa Ng, a 29-year-old PR, is thinking about buying a 532 sq.ft flat in the Latitude for investment purpose. It will cost nearly HK$4.5million.

“I think it is a good time for investment, you know the price of flats is always high in Hong Kong except now comparatively,” she said. “I didn’t buy stocks or mini bonds before, so I didn’t actually lose money in the financial crisis, I want to make a good of them now,” she added.

As it happens in USA, the rebound of real estate market also stimulates the boom of credit industry. However, it seems Hong Kongers are more rational till now.

Hong Kong Mortgage Corporation Ltd, a government supported financial enterprise which has bought over 13.3 billion mortgage loan for commercial banks in Hong Kong last year, is highly focus on Hong Kong this year.

Its Chief Executive Officer, James Lau, said that Hong Kong’s mortgage loan only accounts for 30% of GDP last year and the proportion is so smaller compare with Europe and USA, so Hong Kong has a huge space for future development in the field.

According to the Land Registry of Hong Kong, there are 18864 sale and purchase agreements received for registration in the first quarter this year, 23.4% higher than the last quarter 2008. In the past 19 days this month, there are over 4700 agreements registered, 33% higher than the same period last month.

3. Unemployed Rate Page

Unemployed Rate Keep Rising

By Trista Lv

Hong Kong，April 18th – IJS-GLOBAL- According to Hong Kong Census and Statistics Department, after the explosion of financial turmoil, the local unemployed rate is rising from 3.2% to 5% which is the highest record since 2003. Analysts estimate the rate will keep growing and even increase to 6.5% in the middle of the year.

“The economy of Hong Kong is still weak now, the demands of overseas market are also keep shrinking,” Paul Tang, chief economist of Bank of East Asia, said. “The unemployed rate of the first quarter this year would probably rise to 5.3%, and the number may increase to 6% or even 6.5% in the middle of the year,” he added.

After several months’ economic recession, enterprises in Hong Kong are facing tremendous challenges. Order decreasing, cost rising and other troubles of operation leads to huge cut of labor force.

According to the statistics reviled by Hong Kong government, the unemployment rate from last December to February this year is rising from 4.6% to 5%, demonstrating a 1.2% year-on-year increase.

The unemployed rate is currently high in the areas of construction, transportation, export and import trade, manufacturing and catering business, according to official statistics.

The local job market is not a favorite of economists, though government has carry out lots of policies and spends money to support the job candidates.

The general manager of Besteam Personnel Consultancy Ltd, Edmond So, cited that the unemployed rate will be pushed forward as fresh graduates enter into job market few months later.

The job hunting peak for graduates will occur from June to August, when over 20,000 fresh graduates apply for jobs, said Professor Huang yu of a local university. He also mentioned, it would more difficult for graduates to get a job than before.

Jolie Chan, a senior student of Hong Kong University, said: “I started to apply for jobs online since March and have sent over 20 resumes, however, I haven’t received any reply till now.”

Chan thought lack of working experience made fresh graduates less competitive than other competitors, the bad economic situation made their condition even worse. She also said some of her classmates decide to get further education in order to avoid the period of economic slowdown, but this year the admission criteria is higher than usually in some universities.

The Hong Kong Census and Statistics Department will announce the official research results of Hong Kong unemployed rate of the first quarter on next Monday.

4. HK Soundslide Page

Both citizens and government are actively facing the financial tsunami in 2008 and 2009. Through many news conferences and activities they expressd a strong willing to conquer the difficulties and prepared to received the worst situation.

HK Soundslide

5. HK Album Page