Decline of the Hong Kong property ad

How long before Beijing declares that the new island off Nishinoshima, Japan is historically Chinese territory, and sends fisheries patrol vessels to lurk menacingly on the horizon?

It’s not just the Western Pacific that’s seeing new real estate cropping up right now. Hong Kong newspaper readers will have been slightly perturbed lately by full-page ads showing a curly-haired little boy dragging a creepy-looking toy monkey across a deserted field and giving no clue as to what product or service was being promoted other than the word ‘Visionary’. The ad, it turns out, was for a new development in sunny Tung Chung.

The Standard reports that Joel Chan, the ex-boyfriend of one of casino king Stanley Ho’s daughters, is thinking of trading his Home Ownership Scheme unit in Kowloon Bay for an apartment there. I think this is supposed to make the rest of us want to buy one too (it also reminds us that Stanley Ho has so many female offspring that some are sadly reduced to almost literally slumming it in search of a mate).

Celebrity-Property-Purchase-Watch also reveals singer Karen Mok’s apparent interest in The Avenue – the Urban Renewal Authority excrescence on what used to be Lee Tung or Wedding Card Street in Wanchai. This project is also being widely advertised. While Nan Fung pushes a ‘kid with sinister ape doll’ concept, the theme here is some sort of 1930s retro-glamour-chic.

But if we are nostalgic for anything, it should be for the glory days of property ads themselves. Something has changed. Misleading artists’ impressions have not been banned exactly, but the vendors are now required to cram a lot of not-so-small print onto the ads, stating quite plainly that any and all visuals are, in all likelihood, crap. The fun has gone out of it.

New regulations on the sale of new property are now kicking in. The new law came into effect some six months ago, and after dragging their feet and even delaying launches to avoid the impact, developers are finally having to embrace unprecedented degrees of honesty. The sales brochure for The Avenue makes it clear that this is a densely crowded location (and due to become even more so when Hopewell opens its new mega-hotel a few blocks away). Flick down to page 46, and zoom in, and you see how cramped these flats will be, especially once you subtract bay windows and balconies. The price list presents the same degree of honesty in dollar terms. Beforehand, developers were essentially free to cheat and lie and con. There is even a bureaucracy dedicated to enforcing the rules.

Developers and their slimy intermediaries can still use some psychological trickery. By offering rebates and payment of stamp duty, they can pretend to cut (or, to make themselves feel better, pretend not to cut) prices. By releasing units in batches and tweaking the pricing each time, they can engineer an initial clamour to buy, which – they hope – will gather momentum even as the prices rise as later batches go on sale. And they can sit you at a table, put a form in front of you and give you five minutes to sign, or the deal’s off. All of these depend on the buyers being to some extent stupid rather than just lied to.

More projects are in the pipeline. You won’t hear about it much in the Standard, which is dedicated to talking up prices, but some analysts foresee a steep correction in the Hong Kong property market – as much as 50%. Of course, they’ve been saying this for ages and there’s still no serious sign that the US Federal Reserve is going to stop printing money, which is underpinning equities as well as real estate. But the little green bits of paper still have some purchasing power, and there’s only so much anticipated debasement of the currency you can price into an asset before it ceases to make sense. Why would Joel Chan or Karen Mok, or anyone, buy now? 

I declare the weekend open with a small historical acquisition, or at least memento. The Foreign Correspondents Club is holding a sale of the library of veteran journalist Anthony Lawrence, who died aged 101 a couple of months ago. Faced with such choices as Racine and Goethe, I went for some Gulag-lit…

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16 Responses to Decline of the Hong Kong property ad

  1. maugrim says:

    The Gulag archipelago could well apply to a cold, small concrete box in say Tin Shui Wai. Economic change be coming. China’s economy is slowing and the US, will at some point in the next 12 months begin to taper QE spending (not that its done much help at all). If the new islands ahev oil and or gas, i’ll give it a few weks until some long-lost map of Zheng He’s is found labelling it. A bit like the propaganda in the PCMP about the Chinese Hospital ship ‘racing to the rescue’ two weeks after the event.

  2. Tom says:

    I saw a similarly ‘aspirational’ ad for a property development the other day on the side of a bus.
    The designers hadn’t quite thought through the change in presentation from magazine spread to double decker, so the slogan was at the top while the disclaimers were writ large at eye level, giving the game away in an attractive font.
    Sad, really.

  3. Gweiloeye says:

    Lived in Tung Chung for 2 years – 2 VERY long years. Couldn’t wait to get out of the place. You had a choice of 10 minute walk to MTR or take the courtesy bus that took longer taking into account waiting time.
    Food and beverage were dismal at best and from talking to collegues who still live there – it hasn’t changed since I left 3 years ago.

    So goodluck to these d-grade socialites and celebrities out in the wilderness. Just remember the last flight in/out is about 3.45am. Hope they have double glazed windows.

  4. Big Al says:

    I always make a point of not buying property in any development with a name that starts with “The …”. Which cuts down the choice quite a bit.

  5. reductio says:

    @Gweiloeye

    Oh, I don’t know about that. Tung Chung is set to become a happening place in a couple of years as it becomes the outflow for the trillion + one mainlanders debussing from the Macau-Hong Kong bridge. (Thanks Gordon Wu. You’ve got my vote.)

  6. The Regulator says:

    Tung Chung real estate has averaged a 35% yield annually for the past 10 years.

  7. Oneleggoalie says:

    The Boy pulling his monkey ad was designed by Jimmy Saville before he became a ghost…

    and Mr. Lawrence was a very cool ghost…respect.

  8. Property Developer says:

    The little child looks a tad like the naked Vietnamase one fleeing US napalm.

    The lava building the island has come from Chinese territory, so there can be no dispute about it.

    Big Al, I always make a point of not buying property in any development with or without a name.

  9. Headache says:

    All true, but nothing will change.

    I work in Hopewell Centre, just across from ex-Wedding Card Street, where the management has set up unprecented crowd herding-and-control techniques, including rows of stainless steel barricades and bright red lapel stickers, to manage the hordes of black-suited, black-haired, blank-faced types converging like proverbial flies on sh!t to traipse through show flats somewhere in the upper floors.

  10. gweiloeye says:

    not on topic but couldn’t stop myself. this weeks hk mag interview with …wait for it……
    Zombie Tam

  11. Ex Tax Payer says:

    I think the URA must stand for U -are being Ripped-off… Asshole.

    The prices quoted for just lower floor flats ( 10/F) are more than twice what one would currently pay for a >30/F flat of equivalent size in an older but well-established block in the same Wanchai area.

    Anyone who buys into this junk needs his/ her head examined.

  12. reductio says:

    Do his kids call him the Walking Dad? (Sorry)

  13. Joe Blow says:

    The ex-Wedding Card Street that everyone pretends to be nostalgic about was a decrepit slum. Just because it was 60 or 70 years old does not make it special. Good riddance.

  14. Pornstar Wong says:

    This is terrible. I am now reduced to watching CCTV or Phoenix to get my fix of genuine hard-core property ads. Chinese men in jodphurs, European flunkies and vineyards stretching out as far as the eye can see. All twenty minutes from Shenzhen.

  15. Ex Tax Payer says:

    Update from the Avenue : over 100 property agents milling round Queen’s Rd East and Johnston Road today….

  16. @Joe Blow – the buildings may have been old and decrepit, but that’s why the traditional wedding card printers could afford to rent space there. I would rather have a rundown but real community than an overpriced faux-heritage development with mock-traditional tourist traps. Why can’t the URA do what its name says – renew – rather than destroy and replace?

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