Hong Kong property

First-time Hong Kong buyer splashes out HK$130 million for 15 flats at Kai Tak’s K. City debut

K. Wah Holdings sells all 208 flats in first batch of project at old airport site and is likely to raise prices for further sales given robust demand

PUBLISHED : Saturday, 18 February, 2017, 5:40pm
UPDATED : Sunday, 19 February, 2017, 10:51am

The developer of K. City, the second residential project to hit the market at the site of Hong Kong’s former airport, has sold all 208 flats from the first batch on their debut on Saturday, with a first-time buyer snapping up 15 units worth HK$130 million.

K. Wah International was finalising contracts with subscribers, and would possibly launch an additional batch, said Sammy Po, chief executive in Midland Realty’s residential department, adding that the developer was likely to raise the price given the robust sales.

A Hongkonger bought 15 flats at the Kai Tak development – the upper limit allowed. They are mainly two-room units.

It is the largest number purchased by a buyer since the government raised stamp duty on non-first-time buyers to 15 per cent in November, according to Louis Chan Wing-kit from Centaline Property Agency.

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Chan said he expected the rental rate of return, which is calculated by dividing annual rent by home price, to be 2 to 3 per cent a year.

Buyers – mostly first-time purchasers – who subscribed for two or more flats each grabbed over 120 flats, Po said.

“On one hand people think the return is enticing amid a low-interest-rate environment. On the other hand, they are positive about the potential of the Kai Tak area given that more shopping malls and residential projects will be launched,” he said.

The first batch of flats in 900-unit K. City was priced more than 24 per cent higher than the initial batch for the first residential project, One Kai Tak, which was launched last August.

On February 9, K. Wah released the first price list of 180 units at an average of HK$17,998 per square foot, after factoring in a discount of as much as 15.5 per cent. It then added 98 more units to the batch at an average price of HK$18,988 per square foot after discount. Not all are open for sale yet.

The cheapest unit is a one-room 358 sq ft flat priced at HK$5.85 million.

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That compares with One Kai Tak, the city’s only project exclusively for Hong Kong permanent residents and developed by China Overseas Land and Investment, which was offered for an average of HK$14,471 per square foot after discount.

K. City is also more expensive than units at Taikoo Shing in Quarry Bay, which went for HK$15,396 per square foot, the Post reported earlier.

Over 2,100 buyers expressed an interest in purchasing K. City’s first batch.

Property agents expect upcoming projects in Kai Tak to be priced higher, given strong demand.

K. City did not see much interest from mainland Chinese buyers, even though flats there are available to people from across the border.

“Mainland buyers made up roughly 10 per cent today,” Po said. “I think it’s mainly because it’s harder to move money out from the mainland nowadays.”

In the past, mainland buyers could account for 20 to 30 per cent, especially when luxury projects were launched.”

From January 1, mainland people have been banned from purchasing foreign currency from banks to buy property abroad, which is seen as a move by officials to control capital outflows.