Midland, Hong Kong's only listed property agency, warns that emigration could threaten economic development and housing market

By Lam Ka-sing kasing.lam@scmp.com

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August 31, 2021 4:50 PM SGT

Midland Holdings, Hong Kong's only listed property agency, said on Thursday that a sustained wave of emigration could threaten the development of the city, its economic recovery and the housing market.

The agency reported a return to profit following a recovery in Hong Kong's housing market. For the six months ending on June 30, its net profit amounted to about HK$176 million (US$22.6 million), compared to a loss of about HK$24 million in the same period last year, according to a filing made with the stock exchange. The turnaround was down to increased market share and a successful capture of the rebound in Hong Kong's residential property market, the agency said. The board did not declare an interim dividend, same as last year.

"If the wave of immigration continues or even expands, causing the loss of talent in Hong Kong, it will inevitably affect the development of Hong Kong and hinder its economic recovery. This will inevitably have an impact on the property market," said Freddie Wong Kin-yip, Midland's chairman and controlling shareholder.

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The rebound at Midland comes as the prices of lived-in homes climb to new highs. For instance, the Midland Property Price Index, Midland's own price index for lived-in homes, rose to a new high of 177.27 early this month, an increase of 0.2 per cent over the previous peak of 176.88 in 2019. This gauge echoed increases seen on an index compiled by Centaline Property Agency, a competitor of Midland's.

The rebound in the housing market was also reflected at Sino Land, a major developer in the city, whose underlying profit excluding the effect of fair value changes on investment properties for the full year ending June 30 surged 1.26 times to HK$10.32 billion, according to a filing with the stock exchange on Thursday.

Freddie Wong Kin-yip, Midland Holdings' chairman and controlling shareholder. Photo: Felix Wong alt=Freddie Wong Kin-yip, Midland Holdings' chairman and controlling shareholder. Photo: Felix Wong

"We remain cautiously optimistic about the outlook of the property market in Hong Kong," Robert Ng Chee Siong, Sino's chairman, said in the filing, citing the city's economic recovery and low interest rates. The developer's directors recommended an unchanged final dividend of 41 Hong Kong cents per share and a special dividend of 28 Hong Kong cents per share.

Midland's Wong also called upon the government to pay attention to emigration from the city and suggested that it restart investment immigration, increase job opportunities and raise the quota for the Quality Migrant Admission Scheme from the current 2,000 to 5,000, especially for returnees from overseas. The scheme seeks to attract highly skilled or talented people to settle in Hong Kong to enhance its economic competitiveness.

"The impact of the wave of emigration on the property market did not fully surface in the first half of the year. The main reason was that the purchasing power accumulated since 2019 was large enough to absorb the listings from emigrants in the market," he said.

About 90,000 residents have left Hong Kong in the year after the national security law was imposed, leading to a significant 1.2 per cent drop in the city's population.

Separately, Henderson Land Development priced a batch of 81 flats in the third phase of its The Henley development in Kai Tak at an average price of HK$28,200 per square foot after discounts, the highest price for initial batches among Kai Tak projects. The price is also 6.6 per cent higher than the first batch of phase one, reflecting a general increase in homes prices in the city.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2021 South China Morning Post Publishers Ltd. All rights reserved.

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