Many Hong Kong homebuyers are blinded to overpriced flats in new developments by the lure of grand clubhouse facilities, landscaped gardens, and luxury appliances, agents warn.
The consequences of paying a high premium for flats in such overpriced projects could be particularly dire in remote districts or single-block developments, they say.
A lesson may be learned from the downward spiral in prices at a number of developments in outlying areas, and one such example is what happened to prices at Sun Hung Kai Properties' Valais project in Sheung Shui.
Transaction information from the Land Registry shows the developer sold a 2,531 sq ft house at Valais for about HK$21.01 million, or HK$8,300 per square foot, in October 2010. Two years later, it sold for HK$19 million, or HK$7,507 per square foot.
The cost of rushing in and then cashing out was a HK$2 million loss before transaction fees.
Another example of the perils of paying over the odds because of the lure of 'extras' was provided by Wuhu Residence, developed by Chuang's Consortium International. In September 2010 a 355 sq ft flat in the new development sold for HK$2.93 million, or HK$8,256 per square foot. Last month the same flat sold for HK$2.88 million, or HK$8,113 per square foot.