Sino Land is to offer its low-density residential development in Tai Po at 23 per cent lower prices than the previous launch, in November. This is to compete with a rival project in Sha Tin, according to one analyst, amid speculation of further tightening of mortgage lending for buyers purchasing second homes.
The developer released the first batch of 50 units at its Providence Peak, the second phase of the Providence Bay development, in Tai Po, Hong Kong, at an average of HK$8,379 per sq ft, compared with HK$11,000 per sq ft when it launched the first phase, in November.
Yesterday, it offered the second batch of 80 Providence Peak flats at an average of HK$8,533 per sq ft, and one 2,312 sq ft flat with private pool and 2,573 sq ft terrace at HK$16,080 per sq ft, or HK$37.18 million.
The latest launch price is about 7 per cent below the HK$9,235 per sq ft average price of the first batch of a rival project, The Riverpark, built by New World Development above Che Kung Temple MTR station in Sha Tin.
Property analyst Alfred Lau said the Providence Peak prices were set to compete with those at The Riverpark. 'The two developments are direct competitors as both require large lump-sum involvement,' said Lau, of Bocom International, the investment banking unit of Bank of Communications.
Flats at Providence Peak, with sizes ranging from 788 sq ft to 2,037 sq ft, are being offered for between HK$6.43 million and HK$37 million. The flats may go on sale on Saturday.
Sino Land's offer comes after rival New World Development sold 130 flats out of 186 it put on sale at The Riverpark.
The strong buyer response prompted New World Development to release the price list of another 137 three- and four-bedroom flats, with asking prices ranging from HK$7,800 to HK$12,177 per sq ft, or price tags of between HK$9.57 million and HK$22.1 million. This latest batch of The Riverpark flats can also be released for sale on Saturday.
Victor Tin Sio-un, Sino Land sales and leasing general manager, denied that it was trying to undercut rival developers, saying the company was merely trying a new marketing strategy of a starting 'happy price' to attract market attention.
'Our project is different [from The Riverpark] as ours is a low-rise one,' he said. 'In addition, units in the second phase mostly come with a garden view but flats in the first phase command a sea view. Therefore there can be no comparison.' Responding to media reports that banks would further reduce the loan-to-value ratio for buyers of second flats, Tin said the move would not have a big impact on the luxury residential sector as such buyers did not rely heavily on bank borrowing.
In June last year, the Monetary Authority announced a cut in the maximum amount that banks could advance on a mortgage loan for homes valued above HK$10 million, from 60 per cent of the value of the property to 50 per cent. For properties priced from HK$7 million to HK$10 million, the loan amount was lowered from 70 per cent to 60 per cent. The total loan value cannot exceed HK$5 million.
The number of properties developers may offer for sale in the next few months