More new homes launched in Hong Kong as confidence in housing market increases
The rise in property prices has led market observers to forecast moderate-to-strong growth in prices, and developers are now marketing new homes at a furious pace
Some five years after the government first tightened mortgage rules, raised stamp duty rates and announced ambitious plans to boost housing supply, property prices continue to rise.
The sharp rise in prices has prompted some observers, among them Centaline founder Shih Wing-ching, to revise upwards 2017 price forecasts to moderate-to-strong growth, from cautiously optimistic previously.
With prices reaching an all-time high in February, developers are launching new homes almost every week and the trend is expected to continue throughout this year.
Last year, new home sales totalled 16,562, while the secondary market registered 34,656 transactions. By comparison, last year’s total new home sales volume was about threefold that of 2012 when the buyer’s stamp duty was first introduced, while secondary market sales volume was about half that of 2012.
This year to March, the best-selling developments include The Monterey by Wheelock Properties in Tseung Kwan O; K.City in Kai Tak by K.Wah International; The Pavilia Bay in Tsuen Wan by New World Development; and Cullinan West at Nam Cheong station by Sun Hung Kai Properties (SHKP).
Victor Lui, deputy managing director of SHKP, describes the market response to the sale of Cullinan West as “overwhelming”.
Ricky Wong, managing director of Wheelock Properties, describes the sales at The Monterey as “better than expected”, saying that in the first quarter alone the company generated more than HK$8.8 billion of revenue, which is close to the company’s full-year sales target of HK$10 billion.
In Kai Tak, another hot spot apart from Tsuen Wan and Tseung Kwan O, Poly Property (Hong Kong) is marketing Vibe Centro. By the end of March, more than 166 units had been sold, says Virginia Kao, the company’s head of sales and marketing at a press conference, generating more than HK$1.5 billion of revenue.
Wheelock Properties says it is also preparing for the midyear debut of its Kai Tak project at 10 Muk Ning Street, while actively marketing the stock units at One Homantin in Ho Man Tin and Napain Tuen Mun.
K&K Property said in January it would begin the marketing its Kai Tak development, Victoria Skye, once presale consent is secured.
After a flurry of sales at two Sai Kung projects, The Mediterranean and Park Mediterranean, Victor Tin, associate director of sales at Sino Land, says the company is now preparing for the upcoming launch of the Kwun Tong Town Centre project (phases two and three), a joint-venture project between Sino (90 per cent) and Chinese Estates (10 per cent), in partnership with the Urban Renewal Authority.
Expected to be on the market by the end of the year, the Kwun Tong regeneration scheme will provide about 2,000 residential units and commercial space.
In southern Tuen Mun, HKR International expects its 2GETHER development will be fully completed and delivered to owners in May. Vivian Sze, the company’s general manager of sales and marketing, says some of the remaining units will be open to potential homebuyers for viewing in open houses soon.
In the luxury sector, from Sheung Shui, Sai Kung, Kau To Shan and Yuen Long, to the tree-lined Kowloon Tong and Mid-Levels and the prestigious south side, a number of new launches are expected this year or next.
Henderson Land is marketing the Eden Manor project in Sheung Shui. Located near the Hong Kong Golf Club with extensive views, it will offer 565 apartments (276 sq ft to 1,314 sq ft) and 25 houses (2,601 sq ft to 3,063 sq ft).
Tin expects to market another seafront development at Hong Kin Road, Tui Min Hoi, Sai Kung, during the year, which will offer about 30 homes, including houses and apartments.
In Clearwater Bay, New World Development says it will launch the Mount Pavilia development by early next year, which will provide 680 family homes configured mainly as three and four bedrooms.
Nearby, Chinachem is building a total of 13 luxury houses located at Pik Sha Road and Serenity Path.
New World’s sales plan further includes another low-density development (123 units) in Yuen Long, comprising houses and apartments, and Artisan House in Sai Yin Pun, an apartment complex that will provide 250 smaller units for urbanites.
In Kowloon Tong, Chinachem is working on the Parc Inverness development, a low-rise complex that will comprise 134 apartments with green-building features. Kau To Shan, as a new residential location, is taking shape, with four new projects in the pipeline.
Chung Chi-lam, executive director at Wing Tai Properties, says the company is planning to introduce two low-density projects, Le Cap and La Vetta, it is co-developing with Manhattan Group, around the second and third quarters of this year. Occupying a hilltop, both projects will comprise garden houses and apartments, ranging in size from 1,600 sq ft to 4,700 sq ft.
Le Cap has a site area of approximately 142,000 sq ft, while La Vetta is 318,000 sq ft. These two projects will offer a collection of luxury single-family houses and apartments, many of them duplexes.
“We target to put them up for sale around the second and third quarters of this year,” Chung says.
When asked whether the government’s recent tightening measures should be gradually relaxed as interest rates look poised to go up this year, Chung says that it was not only a Hong Kong phenomenon, but a global one.
“I agree that the current housing and credit policy is used to suppress demand, especially speculative demand while we wait for supply to come into the pipeline.
“While interest rates certainly influence the real estate market, its role nowadays is more or less like a catalyst, not a silver bullet that can be used to cool down the whole market. I think the Hong Kong housing market is primarily driven by occupier demand; speculative activity is confined to a very small proportion.”
He says it is wrong to suggest that the market was in the state of “irrational exuberance” due to strong home sales and record high prices.
“I think it’s not that extreme. Last October, I forecast that the thinning of sales volumes, particularly [in the] secondary market, would skew average prices upwards. If secondary market activity is restored to a healthy volume, then I think average prices will come down,” Chung says.
Chinese Estates says it would put up its upmarket project at 12 Shiu Fai Terrace for sale once presale consent is granted. Andy Tai, the company’s senior manager of sales and investment, says the project would provide 24 homes, at 1,100 sq ft or bigger, to cater to the housing need of larger families.
On the south side, Nan Fung Development is building 52 luxury apartments and two super-luxury single-family houses at Deep Water Bay Drive.
“Prime residential supply is still very limited. This group of buyers are more cash rich and rely less on mortgage funding. I think interest rate hikes will have less of an impact on them,” says Donald Choi, Nan Fung Development’s managing director.