Luxury flat sales poorest this year

PUBLISHED : Monday, 11 June, 2012, 12:00am
UPDATED : Monday, 11 June, 2012, 12:00am


Luxury home sales over the weekend saw their worst performance this year, with developers managing to sell just 20 per cent of 285 flats on offer at two high-end projects - The Riverpark and Providence Peak - as fewer mainland buyers and a rising credit crunch across the border begin to bite.

The poor response was also linked to last week's Hong Kong government warning that it would intervene in the market if prices continue to rise. A bearish stock market and tighter lending for luxury flats also kept local buyers away.

A total of 58 were sold over the weekend, of the 285 offered by New World Development's The Riverpark above Che Kung Temple MTR station in Sha Tin, and Sino Land's joint-venture development, Providence Peak, in Tai Po.

New World Development said 40 flats, or 29 per cent, of the 137 on offer at The Riverpark were sold, while Sino Land said 18 flats, or 12 per cent, of the 148 at Providence Peak were bought.

Following the poor response, New World last night released another 315 flats, with sizes between 660 sq ft and 964 sq ft, at prices as low as HK$5.2 million, an average of HK$8,430 per sq ft. That makes the latest batch of units cheaper by about 9 per cent than last week's first launch price. It also put on the market four flats at The Riverpark, with areas from 953 sq ft to 1,812 sq ft with price tags of HK$8.3 million to HK$20 million.

'This was the poorest sales performance so far this year. It will send a negative signal to the market,' said Sammy Po, a director of Midland Realty, adding that more homebuyers would stay on the sidelines as these two projects would have been a benchmark for the luxury segment.

Po noted mainlanders' buying interest for flats worth over HK$10 million seemed to be on the wane. Most units at The Riverpark and Providence Peak are being offered at between HK$10 million and HK$37 million each.

But Raymond Chan, sales director for Sha Tin and Tai Po district at Midland Realty, said he believed mainland buyers accounted for less than 10 per cent of the weekend sales. 'In that absence of an influx of mainland buyers, big-ticket transactions will be affected.' Despite the sluggish sales, Chan said that flats with better views got the higher asking prices, which indicated demand still exists.

'But buyers have become more selective. They don't mind paying more for the best flats in a development.'

Ricacorp Properties director David Chan said home seekers have become conservative amid rising worries that the government would introduce more cooling measures when chief executive-elect Leung Chun-ying takes office next month. 'Most people are adopting a wait-and-see attitude.'

Victor Tin Sio-un, Sino Land sales and leasing general manager, said the most expensive flat, with a private pool, at Providence Peak had sold for more than HK$37million. 'Buyers need more time to weigh their options as more than 75 per cent of our flats are over HK$10 million,' he said.

Chan of Midland said that flats below HK$10 million appeared to be doing better.

The Housing Society's Heya Green development in Sham Shui Po had sold all its 327 flats on the first day of the launch on Saturday, he pointed out.

Only locals can buy the flats at Heya Green, and each buyer is limited to one flat. The flats were offered at between HK$3.99 million and HK$7 million.