Developers turn bullish on market outlook as sentiment improves
Analysts say the optimism is reflected in the players' move to delay sales schedules and raise prices
Major developers have painted a rosy picture of the property market's outlook, predicting residential prices will climb up to 5 per cent in the coming months.
New World Development chairman Cheng Yu-tung said yesterday he expected property prices to increase 3 per cent to 5 per cent in the next three months due to improved market sentiment, while Cheung Kong (Holdings) chairman Li Ka-shing also believed prices would rise gradually.
Henderson Land chairman Lee Shau-kee was also bullish, expecting property prices to grow up to 3 per cent in the first half next year.
Mr Lee said price rises in the luxury residential sector would outpace those in the other parts of the market.
JP Morgan analyst Douglas Sung said the major developers' optimism could be reflected in their delayed sales schedules.
He said Sun Hung Kai Properties (SHKP) had slowed the launch of new residential developments this financial year.
'Last financial year, SHKP sold about 70 per cent of their properties to be completed in 2003. However, the company has only sold 40 per cent of properties to be completed in 2004,' Mr Sung said.
SHKP announced last month that it would delay the completion of some of its projects, including phases two and three of Park Island in Ma Wan.
The delay would reduce the firm's completion volume this financial year to 3.72 million square feet from 4.8 million sqft.
Midland Realty chief analyst Buggle Lau Ka-fai said developers previously undercut prices to boost sales of new residential projects when there was a slight improvement in market sentiment.
'But developers recently started to raise prices gradually in new developments, even amid a market upswing,' he said.
New World plans to sell 1,500 units worth $5 billion to $5.3 billion in the first half next year. Cheung Kong expects to sell 2,000 units with a market value of up to $5 billion in the same period.
