Its profit attributable to equity holders fell about 55.4 per cent to HK$481.9 million (US$61.5 million), while revenue slumped by 42 per cent to HK$3.1 billion, according to a filing with the Hong Kong stock exchange on Wednesday.
“Despite the government relaxing measures on certain loan-to-value ratios on mortgages, the longer-than-expected US interest rate hike cycle, with interest rates up to a record high since 2001, and the rise in Hong Kong mortgage rates caused both transactions and transaction prices to adjust downwards from May,” the company said in a statement. The high interest rates are, however, expected to peak and fall next year, in line with US interest rate movement, it added.
China’s pivot away from its zero-Covid policy and the reopening of its borders in January “was initially expected to be a strong catalyst to reactivate the economic activities of the mainland, which could also boost global economic growth, and of Hong Kong. Nevertheless, the mainland and Hong Kong economic momentum weakened going into the second quarter”, K Wah said in its statement.
27,000 new homes to hit Hong Kong market this year
27,000 new homes to hit Hong Kong market this year
Hong Kong’s residential property market has been hobbled by higher interest rates, with potential homebuyers becoming cautious to avoid any mortgage pain. In the year’s first-half, among projects completed only 55 per cent of units were sold as of June end, the least in four years and lower than the average sell-through rate of 78 per cent over the last five years, according to property consultancy JLL.
The Hong Kong Monetary Authority raised the city’s base rate in July for the 11th time in 17 months in lockstep with the Federal Reserve, after the central bank of the United States resumed its fight against inflation following a breather in June. Hong Kong’s monetary policy follows the US as the city’s currency is pegged to the US dollar.
Hong Kong commercial banks, including Bank of China (Hong Kong), HSBC and Hang Seng Bank, last month raised prime lending rates for their best customers by 12.5 basis points to 5.875 per cent, and their base rates by 25 basis points to 5.75 per cent.
While “market sentiment has been affected by interest rate hikes”, K Wah said its Grand Victoria project in southwest Kowloon, a joint venture with other developers, recorded the sale of units worth HK$1 billion during the first half. In July, it sold a unit in Chantilly, its luxury project in Wan Chai, for HK$120 million, the company added.
The sale launches of its projects in Kai Tak and the KT Marina will, however, “be subject to market conditions”.
“Despite all the prevailing challenges, the group will continue to focus on developing premium projects in Hong Kong and tier-1 or tier-2 cities in the mainland targeting upgraders, and is well positioned to prudently capture any opportunities in Hong Kong and the mainland,” K Wah’s board said.
Galaxy Entertainment’s revenue jumps 72 per cent as tourists return to Macau
Galaxy Entertainment’s revenue jumps 72 per cent as tourists return to Macau
The developer announced a dividend of HK$0.07 per share to be paid on October 26, according to a separate filing with the Hong Kong exchange. Its shares closed Wednesday’s trading higher by 1.7 per cent at HK$2.39 apiece.
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