Cheung Kong

Scramble for sales precedes new law

Developers woo prospective buyers with range of incentives as they seek to clear unsold flats before tightening of rules on gross floor area

PUBLISHED : Thursday, 18 April, 2013, 12:00am
UPDATED : Thursday, 18 April, 2013, 5:33am

Cheung Kong is offering additional sweeteners, on top of a price cut last month, to try to offload the remaining units at its Lai Chi Kok residential project.

The move indicates the developer's eagerness to clear its stockpile before a new law takes effect on April 29, tightening rules on sales practices for new flats.

Prices of homes at One West Kowloon were cut by an average of 11 per cent early last month.

Cheung Kong Property Development director Francis Wong Si-chung said 120 units had been sold since the price cut, but 14 units remain available.

Yesterday, the firm offered what it called the "final incentives" to clear the last 14 flats.

Buyers will receive a HK$500,000 subsidy for redecoration or a car parking space. In addition, they will also enjoy a 20 per cent discount for a parking space, each worth HK$1.1 million to HK$1.2 million. The promotion will last until Sunday.

Developers are rushing to clear their remaining units before the new law prohibits the practice of including pro rata allocations of portions of "common areas", such as lift lobbies, clubhouses, electricity meter rooms and rubbish collection areas, in the calculation of prices based on the "gross floor area" of flats.

From April 29, sales brochures for all new projects need to specify the size of new flats in terms of "saleable floor area", a common practice elsewhere that refers to the actual useable space in a flat. So-called "common areas" are excluded.

Infringement of the new law by a developer can be punishable by up to seven years' jail and a HK$5 million fine.

On Tuesday night, Henderson Land Development informed property agents it would offer extra sweeteners to speed up presales at High Point in Cheung Sha Wan and High Place in Kowloon City.

Buyers will receive incentives equivalent to a 13.5 per cent price discount, including a cash rebate of 3.75 per cent of the price, two years of management fees and up to HK$1,000 per square foot as a redecoration subsidy.

"The initial response is far from satisfactory," a market observer said. In a housing market dominated by price-sensitive end users, he said, sales would remain slow.

"Genuine homebuyers will need more time to digest the incentives and see if they can afford the monthly mortgage."

Flats at High Point were offered at HK$14,000 to HK$18,000 per square foot of saleable area before the incentives.