Hong Kong developers line up home sales at heavy discounts to clear unsold stock, fearful of further price cuts in a watchful market
- CK Asset, Sino Land and Henderson Land together plan to sell a total of 223 flats this weekend
- CK Asset will sell 35 premium units at its Coast Line project in Yau Tong at prices ranging from HK$7.98 million to HK$12.9 million
Some of Hong Kong’s biggest developers have lined up sales of residential projects with revised price lists, using the recent prices as a benchmark to attract cautious buyers.
A total of 223 units in five projects on Hong Kong Island, Kowloon and the New Territories will be on offer this weekend.
“The housing market had been very quiet until Coast Line project in Yau Tong,” said Derek Chan, head of research at Ricacorp Properties. “The developers are now testing homebuyers’ appetite with prices that are close to or below market prices, using Coast Line as a reference.”
Discounts will be their go-to strategy to clear stock, he added.
CK Asset Holdings, Li Ka-shing’s property flagship, has found success with its reduced pricing strategy, selling 832 of the 886 units on offer at the Coast Line, raking in HK$5.36 billion (US$684 million) in the process. The flats were priced at an average of HK$15,530 per square foot, which attracted thousands of homebuyers who bought all the units in phase II on the first day of sale on August 12, and 95 per cent of phase I flats last Sunday.
CK Asset on Tuesday released the price list of 35 premium units, including 28 duplexes and four split-level units, with the sale to take place on Saturday. The flats are priced from HK$7.98 million to HK$12.9 million after discounts.
Hong Kong’s property market has seen a marked slowdown this year. Of the 7,600 flats completed in the first half, only 55 per cent were sold as of end-June, lower than the average sell-through rate of 78 per cent over the last five years, according to JLL’s latest report.
Most buyers have adopted a wait-and-see attitude and are reluctant to buy flats as they anticipate prices to drop further, according to Norry Lee, a senior director at JLL in Hong Kong.
“The new mass residential projects have to offer bigger discounts to lure buyers,” Lee said. “Coast Line in Yau Tong is an example where the prices are attractive to buyers, marking the start of a price war.”
The batch comprises 98 two-bedroom and 10 three-bedroom units ranging from HK$7.16 million to HK$12.7 million, or HK$15,884 to HK$17,681 per square foot after a maximum discount of 15 per cent.
Villa Garda III’s developers priced the first batch of 130 units last Thursday at HK$16,938 per square foot on average after discounts, 7.8 per cent lower than the HK$18,378 per square foot for phase II last year.
The 138 flats are expected to go on sale on Saturday, with units priced from HK$5.77 million to HK$12.28 million, according to Sino Land.
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Henderson Land Development released the price list for 42 units at the 420-unit development known as The Holborn in Quarry Bay, with the first 20 flats to go on sale this Saturday.
The units include 19 one-bedroom and one two-bedroom flats, ranging from 255 sq ft to 413 sq ft. The flats are priced from HK$5.77 million to HK$11.85 million, or HK$22,609 to HK$28,687 per square foot after discounts.
“The latest price list of The Holborn is nearly 20 per cent lower compared with the first batch,” said Sammy Po, CEO of Midland Realty’s residential division for Hong Kong and Macau.
“Developers will cut prices of their projects by 5 to 10 per cent compared with new projects in the neighbourhood,” Ricacorp’s Chan said.
JLL’s Lee agreed.
“We expect some developers to follow with price cuts later this year while others may slow down project launches,” he said.
Henderson has separately unveiled the price list for 78 units at its Henley Park project in Kai Tak, with 18 of them being put on sale this Saturday at HK7.93 million to HK$18.4 million. The eight one-bedroom flats and 10 two-bedroom units are priced from HK$20,397 to HK$30,456 per square foot.
Elsewhere, Kowloon Development will launch 12 units of two-bedroom flats with storage capacity on Saturday at Manor Hill in Lohas Park. The units are priced from HK$6.91 million to HK$7.32 million after discounts, or HK$16,150 to HK$17,091 per square foot.
