Sun Hung Kai Properties' release yesterday of the first batch of 50 flats at its luxury Riva residential project in Yuen Long underscored the weakening property market.
At HK$12,268 per square foot, the average price at Riva is about 18 per cent lower than the original asking prices. SHKP previously said its target price tag for flats at Riva was HK$15,000 per square foot on a gross floor area basis.
The release came a day after Sino Land pitched its joint venture Park Ivy project in Tai Kok Tsui at an average price of HK$16,055 per sq ft, a figure in line with the secondary transactions in the area.
Riva's average price is still higher than HK$7,000 to HK$10,016 per sq ft transaction prices at a nearby three-year-old project, Yoho Town, also built by SHKP.
"It is a reasonable price as it is a new project. Undoubtedly, developers have to offer new projects at competitive prices to entice sales," Centaline Property Agency managing director Louis Chan said.
"Sales in the secondary market have dropped to below the Sars level of 2003 and home prices are bound to head for a correction … It would not be surprising to see developers launching new projects at below secondary market prices to compete for buyers."
The first Riva batch includes special flats and houses.
The units are mainly five-bedroom flats sized about 1,113 sq ft to 1,640 sq ft in terms of gross floor area, while special units range from 1,581 sq ft to 3,466 sq ft. Most of the special units have a garden or roof area. Houses range from 2,592 sq ft to 3,466 sq ft.
SHKP described the latest offer as a "happy price" for buyers who wanted to live in houses.
The most expensive house costs HK$50.21 million.
The cheapest flats sell for HK$11.93 million, or HK$10,724 per sq ft based on gross floor area, and HK$13,814 per sq ft in saleable area.
"The houses will be released for official sale after the Easter holidays," SHKP deputy managing director Victor Lui Ting said.
In results released yesterday, the Centa-City Leading Index, which covers prices at 100 major housing estates in the city, hit a record 123.66 in the week ended March 17, up 1.29 per cent from the previous week.
Centaline research head Wong Leung-sing said home prices could head for a correction in the second quarter as sales were hit by rises in major bank mortgage rates and a doubling in stamp duty for second homes.
Separately, SHKP said it signed a HK$15.2 billion five-year syndicated credit facility with a consortium of 21 banks. The loan will be used for general working capital for business development in Hong Kong and on the mainland.