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New World Development

New World Development Co (HK stock code 0017) is a Hong Kong conglomerate with operations in property, infrastructure, transport, retailing telecommunications and bus and ferry operations.It is controlled by Chow Tai Food, a holding company owned by businessman Cheng Yu-tung.

PropertyHong Kong & China

New World sees strong response at launch of flat sales at Park Signature, Yuen Long

PUBLISHED : Sunday, 01 September, 2013, 12:00am
UPDATED : Sunday, 01 September, 2013, 3:22am
 

Flats at the biggest development to come to market since rules on their sale were toughened this year sold briskly yesterday.

Aided by an aggressive pricing strategy, New World Development sold 82 per cent of the 238 flats that were on offer at Park Signature in Yuen Long yesterday.

The flats put on sale were a fraction of the 1,620 in the development. Adrian Cheng Chi-kong, New World's executive director and joint general manager, said a second batch of flats would be offered for sale last night. The company did not say how many flats the batch would comprise.

The first batch put on sale ranged from studios to four-bedroom flats, with an average price of HK$8,336 per square foot of saleable area.

Franky Li, a senior marketing executive in his late 20s, said he bought a 302 sq ft flat at Park Signature for about HK$2.7 million.

"I am attracted by the small lump-sum cost. That is my main reason for buying," Li said.

The minimum HK$2.5 million price for a flat at Park Signature is lower than that at two other new residential projects in Yuen Long, Henderson Land Development's The Reach and New World's The Woodsville.

New World said most of the buyers yesterday purchased the flats for their own use. Four buyers needed to pay a 15 per cent additional stamp duty, called buyer's stamp duty, which is levied on property purchases by non-permanent-resident and corporate buyers.

More than half the buyers were from the northwest New Territories. Three were from the mainland.

Thomas Lam, the head of research at property consultant Knight Frank, said Park Signature attracted many first-time buyers.

"The sales are not bad, mainly because the lump-sum price is low," Lam said. "I believe new large-scale projects with a similarly [aggressive pricing] position would raise competition between developers."

Developers are set to put more than 6,000 new flats on sale in Yuen Long and Tseung Kwan O in the next two years.

Property transactions slowed down after the government implemented measures to curb soaring prices of flats. The Residential Properties (First-hand Sales) Ordinance, which took effect in April, requires developers to observe greater transparency in their sales procedures.

Louis Chan Wing-kit, the managing director for residential sales at Centaline Property Agency, said developers might have to offer more discounts to draw buyers. "Developers will have to undercut secondary-market prices to speed up sales," he said.

Meanwhile, lawmaker Abraham Razack said he would table amendments to the buyer's stamp duty when the Legislative Council resumes sitting.

Additional reporting by Yvonne Liu and Tanna Chong

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impala
The 'flat' that Mr Franky Li bought is not really a flat. Not in my book anyway. Cr*p Signature's price lists and floor plans show that this gem is a living room + kitchen (or what passes for it in HK) + bathroom. The bathroom however is not a real bathroom either, since it misses a bath (shower only).

A senior marketing executive in his late 20s like Mr Li would be considered young, creative (and aspiring) middle class anywhere else, with lots of (current and future) earnings power. People like Mr Li should form the bedrock of up-and-coming urban neighbourhoods or middle-class proximate suburbs. They should be able to afford a decent 2-bedroom apartment, or perhaps a small house (not in a HK context obviously) in such an area where they might start a family, have a dog and invite their teenage cousins over to come and stay.

But not in Hong Kong. Here, our rigged, distorted and messed-up property market forces people like him to live in rural Yuen Long (look up where Cr*p Signature is located; it is really is far beyond what anybody could call 'suburb') in a zero-bedroom shower-only studio for which he paid well over USD 400k after he is done with stamp duty etc. And for this money, he will have to sleep in his living room. This is something that I associate with college life, and it is all fine then, but if this is all you can hope for as late-20s senior marketing executive, something is amiss.

And the worst thing is, he even seems pleased about it. For now.
HK_eh!
it's absurd. for $2.5M, Mr. Li bought a shoebox of 302 sq.ft. HK is going backwards to the cages if this continues.
SCMP opinion/editorials should point out how absurd this is, but I guess you can't bite the hands of the property companies that are feeding you advertising dollars.
dng18dng18
Hopefully when QE starts tapering soon and interest rates begin to rise, property prices start to plunge. A correction of 30% would still make prices wildly expensive though...
robroy
jve - totally agree with you, prices could drop 30% from this level and would still not been anywhere near to in-line with what "normal people" like Franky earns. A 50% drop in prices and the market would be very expensive, but still possible to enter for people like Franky, in a normal area with a decent quality of life.

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