13,000 buyers swamp Tseung Kwan O property project for just 400 flats, despite Hong Kong official warning about market
Eager punters queue up in hopes of landing flat at Wings at Sea, despite Hong Kong Monetary Authority warning against ‘irrational’ purchases
More than 13,000 prospective buyers swamped a Hong Kong property development in Tseung Kwan O on Saturday looking to snap up 400 newly released flats, despite a warning from the city’s Monetary Authority about “irrational” purchases.
Long queues were seen at the International Commerce Centre in West Kowloon, where the sales office for developer Sun Hung Kai Properties’ Wings at Sea project is located. The company kicked off sales for the first phase of the Lohas Park development, east of Kowloon, at 9am.
A total of 13,700 would-be buyers registered for a chance to purchase one of 403 flats, which will be released in three batches. The average price of a property in the development is over HK$14,000 per sq ft, a record for the Lohas Park area.
“Some parents are helping their children buy properties [so the parents] can avoid the double stamp duty incurred if they were to buy a second property,” said Louis Chan, Asia-Pacific vice-chairman and managing director for residential sales at Hong Kong property agent Centaline. He said he estimated about half of the customers were first-time buyers receiving help from their parents.
“The starter home scheme pledged by Chief Executive Carrie Lam Cheng Yuet-ngor has made buyers hesitate recently,” he said, referring to a coming subsidised housing scheme announced by Hong Kong’s leader that will aim to help young residents get on the property ladder.
“Therefore the response to new projects has become less intense, but it will take three to four years to find land and build these starter homes, so the scheme will not affect the immediate shortage of housing or reduce property prices dramatically for now.”
The enthusiasm from prospective buyers continued a day after the Hong Kong Monetary Authority released its latest half-yearly monetary and financial stability report, which highlighted the growing trend for young homebuyers to rely on help from their parents. That support even included taking out mortgages on a family’s main residence to fund flat purchases, the authority said.
Norman Chan Tak-lam, the head of the Monetary Authority, speaking on a radio programme on Saturday morning, said it was “very irrational” to enter the market based on expectations that home prices would never go down.
“Judging from Hong Kong’s history and property markets around the world, I have yet to see a market which only goes up and not down, or one which only goes down and not up,” he said.
He would not rule out another round of tightening measures on property mortgage loans, as he said there were no signs of a downward cycle in the market at the moment.
“If the upward cycle continues, our regulatory measures will continue to tighten.”
One eager buyer for Wings at Sea was a middle-aged man surnamed Cheung, who was looking for a two-bedroom flat for about HK$5 million for his son. He shrugged off the authority’s warning.
“I don’t think what [Norman] Chan said is true. I believe housing prices in the city will still continue to rise moderately,” he said.
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Sun Hung Kai Properties, Hong Kong’s largest developer by market value, usually sets a price benchmark when it launches projects. Prices for developments at Tseung Kwan O’s Lohas Park have been capped by its proximity to a landfill site and lack of commercial facilities.
The first 208 units at Wings at Sea, about a 10-minute walk to Lohas Park MTR station, have an average discounted price of HK$12,788 per sq ft – the highest starting price of any development launch in the area, where close to 10,000 units are under construction. Prices for the second batch of 105 flats announced on Saturday were 10 per cent higher, at an average of HK$14,063 per sq ft, since they offer sea views.
The third batch is being sold at HK$15,145 per sq ft, 18 per cent higher than the first batch.
Meanwhile, Henderson Land Development has sold a 5,000 sq ft duplex unit at 39 Conduit Road in the upmarket Mid-Levels neighbourhood for a record price in Asia of HK$521.95 million, or HK$105,000 per sq ft.
Statistics from the government’s Rating and Valuation Department show home prices reached an all-time high in August after 17 consecutive months of increases.
The Monetary Authority report pointed out that many families, especially those with a weaker financial capacity, would be susceptible to market shocks.
At 3pm on Saturday there were still long queues at the Wings at Sea sales office, but the crowds had finally vanished by 4.30pm.
Close to 70 per cent, or about 280 flats, had been sold as of 5pm, with prices starting from HK$4.3 million.