After vacillating and hiding for far too long behind the rest of the world, the tide of protests finally prompted Chinese authorities to swiftly take down most of its lockdown measures - almost like a domino fall, and it is still in motion by the day.
Good news at last for HK properties as the PRC money and talent starved SAR will finally be able to play its conduit role without which it can hardly be called an international 'anything' centre...
So briefly here are some of the big changes that have been implemented or hinted to be put into effect:
HK relaxations:
- LeaveHomeSafe (the identity tracing app) scrapped from 14th Dec - residual restrictions of vax status scan still required to enter dining venues (article 3);
- Quarantine-free travel between China and HK from early January - see article 2;
- We expect the embarrassing climb down by officials means the vax pass may also be abandoned in Jan, signalling a full return to normal after 3 years of prison like living.
China's “Ten New Measures”:
The measures (details in article 1) came down like a tone of bricks and swiftly swept through China like wild fire from 13 Dec onwards. The impact is jaw dropping in its magnitude and extensiveness, one day after the announcements:
- Search volume for air tickets increase by 438% ;
- Search volume for air tickets during Chinese New Year increase by more than 5 times;
- Search volume for train tickets increase by 276%;
- Search volume for train tickets during Chinese New Year increase by nearly 7 times;
- Search volume for hotels increase by 7 times
- vs a week before, scenic spot ticket sales rose by 59% to 300%
Back to HK, we expect the reopening to finally put a bottom beneath the rental levels of ALL property types, with prices benefitting as well. Take retail for example:
Assuming PRC visitor numbers return to pre-unrest/pre-lockdown days in the 2017-18 area (blue arrow), we could safely project F&B value to go up 24% from here (or combined 12% to mid-23 (lower red arrow) and then another 13% to end-24 (upper red arrow)), or if we ignore the events of the past four years and assume the pre crisis trend (red dotted line) will continue, an even larger 51% rise from here (red dotted arrow).
Extending the analysis to retail rents:
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It is not difficult to see retail rent will rise some 10% conservatively from here in the next year and half (red arrow), and if a return to trend unfolds, even 23% rise from here over the same period (dotted red arrow). All this is before we factor in the high inflation that is now the norm, which tends to push up rents even when the economy slows...
Now is a good time to lock in your rental agreements (if not already late), before aggressive hikes becomes a norm in the new year?
-----------------------------------------------------article 1------------------------------------------------------------
The “Ten New Measures” have just been released, and the search volume for air tickets has increased by 438% in an instant, and the search volume for hotels on New Year’s Day has increased by 7 times! Searches for air tickets soar to three-year high on the eve of Chinese New Year
December 07, 2022
On December 7, the National Joint Prevention and Control Mechanism issued the “Notice on Further Optimizing and Implementing Prevention and Control Measures for the New Coronary Pneumonia Epidemic”. The notice proposed a total of 10 specific items, including scientifically and accurately dividing risk areas, further optimizing nucleic acid testing, optimizing and adjusting isolation methods, etc....
Optimizing the implementation of the new ten rules for epidemic prevention and control is here! focus
- Temporary blockade in various forms shall not be adopted;
- No more inspections of nucleic acid test negative certificates and health codes for cross-regional migrants, and no landing inspections; except for nursing homes, welfare homes, medical institutions, childcare institutions, primary and secondary schools and other special places, no nucleic acid test negatives are required proof, without checking the health code;
- Asymptomatic infected persons and mild cases who are eligible for home isolation are generally home isolated;
- High-risk areas with no new infections for 5 consecutive days should be unblocked in time;
- The online and offline purchase of antipyretic, cough, antiviral, cold and other over-the-counter drugs shall not be restricted;
- Accelerate the vaccination of the elderly against the new crown virus;
- Promote the implementation of hierarchical and classified management;
- Non-high-risk areas shall not restrict the movement of people;
- It is strictly forbidden to block fire exits, unit doors, and community doors in various ways;
- Schools without the epidemic should carry out normal offline teaching activities.
above text from Google Translate, Chinese version:
-----------------------------------------------------article 2------------------------------------------------------------
Hong Kong to send ‘thousands of officers’ to checkpoints along mainland Chinese border ahead of shift towards freer travel
Cannix Yau and Clifford Lo | 16 Dec, 2022
...
[quoting key points of the article only]
Sources previously told the Post that the city was set to fully reopen its borders with the mainland and resume the high-speed train service to Guangdong from early next month.
The expected reopening follows the government’s decision to roll back anti-epidemic restrictions, such as easing entry rules for arrivals and no longer relying on the “Leave Home Safe” risk-exposure app, despite a significant increase recently in Hong Kong’s virus caseloads.
Thursday marked the highest number of daily cases since March 18, with health officials reporting 17,080 infections, 831 of which were imported, and 19 additional deaths.
The city’s overall tally stands at 2,307,397 cases and 11,075 related fatalities.
As part of eased restrictions on the mainland, authorities there have introduced measures to facilitate the cross-border flow of people and goods from Hong Kong, including increasing the daily quota for the number of residents allowed to cross from 2,000 to 2,500 on Thursday.
From Monday, mainland authorities have also allowed cross-border truck drivers to collect and deliver goods directly to destinations there without using the designated checkpoints.
...
A third government source said authorities would conduct refresher training for officers, inspect equipment and test computer systems, as well as carry out disinfection of facilities before reopening the checkpoints.
...
A source familiar with the plan to fully reopen the border said Beijing was keen to restore travel by earl He added that the reopening had been planned for a long time but was postponed several times as a result of different circumstances.
...
Hong Kong Railway Employees Union chairman Tam Kin-chiu said the move was subject to government approval but rail staff had already received rosters for both days.
-----------------------------------------------------article 3------------------------------------------------------------
Covid-19: Hong Kong axes app QR scanning to enter venues and lifts some restrictions on arrivals
by HILLARY LEUNG | 13-Dec-2022
While the use of the LeaveHomeSafe app for entering businesses has been scrapped, members of the public must still show their Vaccine Pass. Separately, arrivals will no longer be issued an amber code.
Hong Kong will no longer require members of the public to scan their Covid-19 LeaveHomeSafe app to access restaurants and other businesses starting from Wednesday, though vaccine proof will still be needed.
Arrivals will also not be issued an amber code in their LeaveHomeSafe app, meaning that people will be able to visit restaurants and other businesses during their first three days of landing in Hong Kong. Vaccine proof, several rounds of testing, and a health declaration will still be mandatory to enter the city.
Making the announcement at a press conference on Tuesday, Chief Executive John Lee said the adjustments were based on data and risk assessment.
“The risk of imported cases to Hong Kong is even lower than the risk of getting infected in the community,” Lee said. “Cancelling the amber code [arrangements] will not increase the risk of getting infected locally.”
He added that under the new rules, the LeaveHomeSafe app will only issue two different codes – red for those infected with Covid-19, and blue for those not infected.
The use of the Vaccine Pass, however, will still be required to enter businesses.
...
Residents are still required to wear face masks, including outdoors, and a gathering limit remains in force for groups larger than 12.
Arrivals to the city are also subject to two PCR tests and daily rapid tests for their first five days in the city.
He added that the resumption of “normal travel” with the mainland was “close to [his] heart.”
“I’ll do everything that can facilitate it, but we also must be aware that the decision must similarly be made on the actual situation… but I think that all people want to have as few restrictions as possible,” Lee said.
Hong Kong has seen 2.26 million cases of the virus since the onset of the pandemic, and 10,984 deaths according to the government’s Covid dashboard on Tuesday.
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