Developers scramble as abundant supply and soft government land tender point to changing fortunes in the luxury sector
About 3,100 luxury units are set to be marketed in Kowloon soon, experts say
Property developers are ramping up marketing efforts for high-end properties ahead of a big batch of new releases in coming weeks and on the heel of a government land tender in Stanley on Tuesday that came in well below expectations.
Cheung Kong Property released the sale of The Zumurud in Ma Tau Kok at lower than expected prices on Wednesday, prompting other developers to speed up marketing on four luxury projects beginning Thursday.
These include two in Ho Man Tin - Sun Hung Kai Properties’ Ultima phase two development and Kerry Properties’ Mantin Heights. In addition, HKR International and Nan Fung Development will promote its project in Kau To Shan, Sha Tin, while Paliburg and Regal International plans to kick off the marketing for its villa development in Yuen Long.
“It shows developers are eager to increase their sales before the buying demand dried up,” said Alfred Lau, an analyst at Bocom International.
CK Property released the price list for the first batch 50 units at 228-unit The Zumurud at between HK$25,826 and HK$27,369 per square foot. Factoring in a maximum discount of 12.2 per cent, the selling price would be as low as HK$22,671 per square foot.
“This project could pitch at HK$30,000 per square foot previously but now have to come down to HK$20,000 plus per square foot,” said Lau, pointing out its profit margin could be squeezed to 20 per cent, from previous 30 to 40 per cent.
The Lands Department on Tuesday awarded a luxury residential site at Wong Ma Kok Road, Stanley to K & K Property at HK$2.81 billion, or HK$12,435 per square foot.
The sale price was 27 per cent below the low end of the HK$3.8 billion to HK$5.43 billion range forecasts by surveyors.
Analysts said the sales outcome was a strong indication of developers’ extreme caution regarding the high-end sector which is traditionally considered more resilient in a market downturn.
CK Property executive director Justin Chiu Kwok-hung said the developer would offer 15 units at The Zumurud for tender from March 21 until May 31.
“The units are being offered at a big discount prices and will have room for further price increase,” said Chiu.
Meanwhile, Wheelock Properties said on Wednesday it would release the price list for its luxury project, One Homantin, within weeks.
Banks were also active in promoting mortgage lending options. Bank of East Asia announced it would offer home buyers a fixed rate at 1.8 per cent for the first year, and from the second year 1.6 per cent above the Hong Kong Interbank rate (Hibor), now at 0.23 per cent.
“It is the city lowest home lending rate with effective rate of just 1.83 per cent,” said Centaline Mortgage Broker.
Calculations by industry experts indicate more than 3,100 units, including The Zumurud, in five luxury developments are due to be released in Kowloon soon.
SHKP’s 628-unit Ocean Wings in Tseung Kwan O and Kerry Properties 1,429-unit Martin Heights in Ho Man Tin have secured pre-sale consents. The other projects include the 561-unit One Homantin in Ho Man Tin built by Wheelock Properties, and SHKP’s 271 -unit in the Ultima phase two development.