Hong Kong development with small flats snapped up by first time buyers
Kowloon project from China Overseas Land and the Urban Renewal Authority sells out in four hours after being 33 times oversubscribed
All 164 units of a Kowloon property project offered by China Overseas Land and Investment and the Urban Renewal Authority sold out in four hours on Sunday after recording a subscription multiple of 33 times, one of the highest for a new residential project in recent years.
Agents said the My Place project's proximity to the MTR station being built in To Kwa Wan, conservative pricing and small square footage were behind the good sales results, while signs that an interest rate increase was less imminent than earlier expected and the sharp stock market rally in recent weeks had also lifted buying sentiment in the wider property market.
"My Place's popularity is largely attributable to its units' small size, which are highly sought after, with strong demand from first-time buyers who couldn't afford to buy larger units," Sammy Po Siu-ming, the chief executive of Midland Realty's residential department, said. "The fact that they are priced at around 10 per cent lower than other new-build units in the district also helped."
He said My Place had received strong interest from both end-users and investors, with the latter accounting for around 40 per cent of the units sold yesterday. The project was offered only to Hong Kong permanent residents, with sales restricted to no more than two units per person.
At an estimated rental value of around HK$45 a square foot, landlords could see returns of 3.5 per cent to 4 per cent, compared with the prevailing yields of 2 per cent to 3 per cent from mid-sized to large residential units in the market, he added.
My Place is a 168-unit single-block development, of which half are open-plan and half are one-bedroom units, ranging from 229 to 357 square feet each.
They were sold at HK$3.9 million to HK$7.23 million each, or HK$14,636 to HK$20,790 per square foot of usable space. After an up to 12 per cent discount in the form of stamp-duty subsidy and other concessions, buyers could be paying an average price of as low as HK$15,103 per square foot.
Four of the units have been reserved for flat owners of the original building torn down for redevelopment.
My Place's strong sales response comes after the Hang Seng Index climbed 18 per cent since mid-March on the back of moves by Beijing to allow mainland fund houses to invest in Hong Kong stocks.
"The wealth creation effect from the stock market rally has definitely helped sentiment, especially in the luxury market, as we have seen higher turnover of units worth tens of millions of dollars," Po said. "Some investors have sold stocks and bought properties, while some previously sitting on the sideline after the government's tightened rules on mortgage financing in early March have made purchases."
Developers have stepped up launches of luxury units this month to take advantage of the sentiment, while mass housing project launches were not expected until next month, agents said.
Meanwhile, a spokesman for the Sino Land-led Providence Bay residential project in Tai Po said three units in its first-phase development priced at HK$14 million to HK$16 million each had been sold over the weekend. Sino Land put 19 units on the market on Saturday.