The Zhitong Finance App learned that Morgan Stanley released a research report saying that the new “Policy Address” and the first “Five-Year Plan” generally met the expectations. There were no surprises on the housing demand side. The policy focus is still on implementing, adding new supplies, and attracting talents and students in the northern metropolitan area. The bank believes that the increase in additional supply and public housing production in the northern metropolitan area should not significantly change the current housing supply and demand pattern in the short term, but concerns about recent regulatory developments and interest rate hikes may continue to put pressure on developers. The bank rated the local real estate industry as “attractive”, preferring shares with visible recurring income and active capital circulation, including Swire Properties (01972), Lingzhan Real Estate Fund (00823), and Land Land. All three ratings were “increase in holdings”.
The bank pointed out that the government aims to provide 900 hectares of mature land and 70,000 residential units in the northern metropolitan area over the next five years, which is estimated at a 7:3 ratio between public and private businesses, which means supplying about 21,000 additional private homes. Following Hung Shui Kiu, the second large-scale land sale pilot project in Fanling North can be launched as early as the end of 2026. University towns have become the driving force for new demand. The three university towns are planned to have a campus area of about 300 hectares, and the target number of non-local students is about 90,000 in the 2026/27 academic year. Demand for additional housing brought about by childbirth-related measures is limited, and the maximum new home stamp duty relief for eligible families with newborn babies is only HK$20,000.
The bank also said that the authorities will submit draft regulations to allow the privatization/restructuring of real estate investment trusts and provide stamp duty relief for non-residential assets transferred to listed REITs; at the same time seek dual listing of high-quality overseas REITs in Hong Kong and the integration of REITs into connectivity as soon as possible. If REIT Connect makes progress, leading companies may become the main beneficiaries.