Developers in New Territories face tough battle to lure buyers
With supply rising and buyers cautious, new projects will have to offer incentives
Developers with projects up for sale in the New Territories will be competing fiercely for home buyers from now until June, property agents say.
That's because almost 70 per cent of new homes available for sale in the first half of the year are located in the New Territories, and since the government has signalled a move to increase land supply, developers will speed the launch of new projects to raise cash for land replenishment.
As many as 14 projects offering a total of 3,138 flats are in the sales pipeline for the second quarter, according to data compiled by Midland Realty. More than 2,100 are in the New Territories, 630 in Kowloon, and 405 on Hong Kong Island.
"Faced with the planned increase in supply and weakening buying demand, developers will have to offer their new projects at competitive prices in order to entice sales," said Buggle Lau Ka-fai, chief analyst at the agency.
Patrick Wong, an associate director of property research at BNP Paribas Securities, said many potential buyers expected property prices to correct in the short term and have adopted a "wait-and-see" approach.
"Although secondary volumes remain at an ultra-low level, we expect developers with flexible pricing strategies to attract fundamental demand, especially for projects in the mid-end segment," he said.
Last Thursday, Cheung Kong took the lead in the widely expected intensification of competition between developers, and cut prices of 20 units at One West Kowloon residential project in Lai Chi Kok by 6 to 17 per cent. The move came a week after the government doubled stamp duties for those who bought second flats in a bid to curb speculation and rising prices.