Hong Kong developers under pressure to cut prices after lukewarm weekend sales
Instead of slashing prices, developers have preferred to offer array of incentives
Hong Kong developers are likely to have to cut selling prices as a last resort in order to offload projects in non-core areas next year, with home seekers tipped to stay out of the market following an expected US interest rate increase next week.
Instead of slashing prices, developers have been offering an array of incentives such as aggressive home financing schemes, tax rebates and pricing new flats close to the level being achieved in the secondary residential market to drum up sales.
But those promotional strategies appear to have lost their appeal to prospective buyers in a market clouded by increasingly negative news and the prospect of the US raising interest rates for the first time in the 10 years.
Nicole Wong, regional head of property research at CLSA, said she expected developers would cut prices directly when they discovered incentives and home financing schemes were no longer drumming up sales.
Home sales will be hit further as sentiment could turn even worse next year
“The price cut may occur within six months,” Wong said.