Hung Hom housing project sees strong demand despite high prices
Sun Hung Kai Properties and New World Development will have an additional reason to celebrate this Christmas, as flats offered for sale at their Harbour Place development in Hung Hom have attracted strong demand amid falling interest rates and rising household incomes.
Hundreds of home-seekers and property agents were queueing outside the sales office in Tsim Sha Tsui at 11pm yesterday, and market sources said 'a large number of orders' were placed for the 1,080 units on offer. The project comprises 2,470 units of 500 to 770 square feet in seven blocks.
The units were snapped up despite being about 30 per cent more expensive than flats in the neighbourhood. The units were offered at between HK$5,000 and HK$9,365 per square foot, or an average of HK$7,000 per square foot.
'Prices for units at HK$9,000 plus per square foot are unbelievably high,' said Adrian Ngan Wai-hung, a property analyst at Bear Stearns. 'The sales figure will serve as an indicator of market prospects.'
The pricing had probably taken into account an expected rise in home values next year, Mr Ngan said, adding that prices would probably climb 20 to 30 per cent next year.
SHKP and New World may take up to 12 months to complete the flats, a key lure for investors as they can capitalise on any rise in value and resell before arranging mortgages.
'It provides greater flexibility for investors who can save transaction costs if they find a buyer within 12 months,' Centaline Property Agency chairman Shih Wing-ching said.
Harbour Place, formerly Hunghom Peninsula, was built under the now defunct government-subsidised Private Sector Participation Scheme.
Andy Or, a sales manager at Midland Realty, said flat owners at nearby Laguna Verde had raised their asking prices 10 to 15 per cent in response to the launch.
After four interest-rate cuts and rising household incomes, property deals shot up 72 per cent to 18,105 last month from 10,475 in September. This year, the average transaction price in the primary market is HK$6.54 million, beating the HK$5.37 million at the peak in 1997, Midland figures show.
Stewart Leung Chi-kin, an executive director of New World, said after six years of delays, margins were not as high as market expectations.
A newspaper said yesterday the developers could reap a 90 per cent margin at an average HK$7,000 a square foot as the development cost was only HK$3,700 a square foot.
