The surprise move by Cheung Kong (Holdings) to cut sale prices on its DeerHill Bay development has further cooled a depressed residential market, hurting buying sentiment and prompting home owners to slash prices.
Analysts expressed bewilderment at the developer's tactics and said they did not understand why it released an extra 172 units on Wednesday, having learned that initial response was weak, and then announced a 20 per cent price cut on Thursday.
Some suggested the sharp price adjustment was partly attributable to the conservative valuation and mortgage policies being adopted by banks towards the Tai Po project.
Others said Wheelock Properties' decision to sell its Forest Hill flats, also in Tai Po, at a cut-price $5,000 per square foot had also affected sentiment.
Wheelock said it sold about 70 per cent of the 35 units in Forest Hill yesterday. The selling price of $5,000 per sq ft represented a 25 per cent drop from the last sale in August.
Critics said Cheung Kong's price cut and decision to sell so many units had fuelled speculation developers were pessimistic about prospects and would rather unload properties as soon as possible.
After the 20 per cent price cut, apartments in DeerHill Bay are selling at $9,568 per sq ft while houses are priced at $11,267 per sq ft.
