Housing scheme flats 'pose direct threat' to private sales

PUBLISHED : Wednesday, 03 January, 2001, 12:00am
UPDATED : Wednesday, 03 January, 2001, 12:00am

The price of private homes will fall by five per cent in the first quarter of the year because of the sale of more than 6,300 luxury Home Ownership Scheme flats at cut prices, property agents said yesterday.

The warning was made after the Housing Authority announced yesterday it would sell three 'quality' Home Ownership Scheme projects with spectacular sea views close to MTR stations. A total of 6,339 new flats in Lam Tin, Aberdeen and Tseung Kwan O - which are still being built - go on sale today.

Bauhinia Garden in Tseung Kwan O will have a swimming pool, tennis court, fitness club and Internet access. The flats will be sold at prices ranging from $579,800 to $1.9 million, with floor sizes ranging from 502 to 846 square feet - a 44 per cent discount on market prices.

It is the authority's first sale since it suspended the sales of its Home Ownership Scheme flats in June to help revive the sagging property market.

The president of the Society of Hong Kong Real Estate Agents, Alex Tang Yee-man, warned the flagging private market would be dealt a serious blow by the move. He said private developers had suspended sales of small and medium-sized flats in the past three months to avoid over-supply.

He said the price of private flats would drop by three to five per cent in the first quarter of the year unless interest rates fell to attract home buyers.

'The move will pose a direct threat to the general market because the authority is now selling medium-sized luxury flats with sea views, a swimming pool and other facilities at a very attractive price,' said Mr Tang.

'Only several thousand transactions take place in the private market every month. I am worried those who plan to buy private flats will end up buying the subsidised flats.'

Centaline Property Agency manager Wong Leung-sing said private developers had been under pressure to cut flat prices due to over-supply of flats and fierce competition from the Housing Authority and the Housing Society - the two major suppliers of subsidised flats. Mr Wong said there was no room for further price cuts in the private market.

'A Sha Tin project was sold for only about $2,000 per square foot three months ago - which is 40 per cent of the price level during the property peak in 1997,' Mr Wong said.

He expected private developers to cut supply from 35,000 flats this year to 20,000.

Assistant director of Housing Cheng Yao-kong said the three projects would draw a good response from the public. But he denied the authority's move would hurt private developers.


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