image image

Hong Kong stamp duty

'Slow start' to flat sales at One West Kowloon

High base price keeps corporate and mainland buyers away on first day, property agent says

PUBLISHED : Thursday, 06 December, 2012, 12:00am
UPDATED : Thursday, 06 December, 2012, 3:16am

Cheung Kong sold 30 units of its Lai Chi Kok project in the first hour of its launch yesterday, a result that market watchers described as a poor sales performance.

The developer, which offered 100 units of One West Kowloon from 7pm yesterday, said it had collected around HK$300 million selling the 30 units in an hour, with an average price of HK$11,000 per sq ft. Cheung Kong did not provide the final sales figure for the night. Most units sold had four bedrooms.

"Sales were really bad," said a property agent who did not want to be identified. "Usually about 60 per cent of the flats are sold on the first night."

The 286-unit project at 873 Lai Chi Kok Road is the first residential development to have released a price list since the government imposed new property restrictions in October, which include a 15 per cent stamp duty on non-local and corporate buyers.

The first 100 units offered by the developer feature three- and four-bedroom homes sized between 1,158 sq ft and 1,307 sq ft.

The agent said the prices, ranging from HK$11.73 million to HK$15.63 million, were too high, so corporate and mainland buyers stayed away. A high base price meant they would have to pay more than HK$1.5 million extra.

"And mainlanders are always the major buyers on the first day of a launch. Without them, sales figures are bound to be hit," the agent said.

Another agent added that buyers were adopting a "wait-and-see" approach after the government's latest cooling measures. He also said most buyers found it difficult to raise the down payment because under Monetary Authority rules, a buyer could only borrow about half the flat price if the property was priced over HK$10 million.

Henderson Land and New World's The Reach in Yuen Long, which went on sale the night before the latest curbs were introduced, sold about 230 units on the first day. But the flats were also cheaper, starting from about HK$3 million.

More than 400 buyers registered and deposited cheques before One West Kowloon's launch, Cheung Kong's executive director Justin Chiu Kwok-hung said. Only a few of them were company buyers.

"Most buyers for this project are end-users. We only have a small number of buyers from the mainland … less than 1 per cent," Cheung Kong Property Development director Francis Wong Si-chung said, adding that about 5 per cent of the buyers were from the mainland before the new measures came into being.

A local buyer, who identified herself as Ms Wong, said she and her fiance were entering the market now because the price was reasonable. "It's about 20 per cent cheaper than some flats in the neighbourhood," she said.