The big profits made by developers over the past year are tangible testimony to the residential market's continued strength, characterised by strong demand and tight supply, a solid economy and record low mortgage rates.
Not surprisingly, luxury home sales have contributed a substantial amount of earnings to the stellar financial results of property giants.
Sino Land, a top-three developer in terms of sales, has many luxury projects such as the villas at St Andrews Place, overlooking the Beas River Country Club in Fanling. The company made a net profit of HK$5.34 billion during the six months that ended on 31 December, up 62 per cent year-on-year. Excluding property revaluation gains, its underlying profit grew to HK$2.43 billion from HK$2.03 billion.
The Hermitage, a newly completed residential project in Tai Kok Tsui, was the main driver to earnings growth. Sales revenue also came from The Palazzo, The Balmoral, Goodwood Park, Lake Silver, One New York, The Dynasty, Vision City and Vista.
The interim net profit of market leader Sun Hung Kai Properties (SHKP) rose by 36 per cent to HK$21.02 billion, while underlying profit, excluding property revaluations, surged by 60 per cent to a record HK$10.4 billion.
Robust sales of two large-scale luxury projects, Valais at Beas River and Larvotto in Ap Lei Chau, contributed to the strong result. Sales proceeds of Hong Kong properties amounted to HK$21.26 billion during the six-month period to 31 December.