Sun Hung Kai’s strong sales at Century Link to spur rivals to launch projects
Strong sales results of a primary project by Sun Hung Kai Properties and improved buying sentiment are expected to fuel rival developers into launching their own developments, according to analysts.
Cheung Kong (Holdings) and Henderson Land Development are expected to release their developments in the coming weeks, according to BNP Paribas property analyst Patrick Wong.
SHKP launched the fourth batch of Century Link in Tung Chung last Saturday and sold out all 204 units. The project has 1,407 units and 82 per cent of them have been sold for about HK$6 billion over the past four weeks.
BNP Paribas expected projects to be sold in the coming two months. This includes the 1,648 unit Hemera in Tseung Kwan O, jointly developed by Cheung Kong (Holdings), Nan Fung Development and MTR Corp; One Kowloon Peak in Tsuen Wan by Cheuk Nang (Holdings) and Jones Hive in Tai Hang, jointly developed by Henderson Land Development and Soundwill.
Property agents said buying sentiment in the secondary market also improved.
According to Hong Kong Property Services (Agency), 72 units were sold at 20 major housing estates tracked by the agent during the period between January 19 to 25, representing an increase of 15 per cent and a record high in the last four months,
Buyers expected the low interest rate environment would continue after the quantitative easing policy announced in Europe, said Jeffrey Ng, senior director of Hong Kong Property.
The European Central Bank said on January 22 that it planned to buy government bonds from March until the end of September next year in its latest attempt to revive the euro-zone economy.
Ratngs agency Fitch last week had a report saying that macro-prudential measures would lead to a marked slowdown in price growth in Hong Kong.
Home prices are forecast to be to be flat this year versus a 10 per cent increase in 2014, and an average gain of 15 per cent over the previous decade.
The government’s cooling measures should stabilise affordability at current levels, though home prices already are highly stretched relative to incomes, the report says.
Fitch maintains that Hong Kong does risk a downturn, considering the combination of the stretched affordability, rising rates, and the large involvement of speculative investments in the sector.