Sun Hung Kai Properties (SHKP) has succumbed to market forces by offering a new luxury residential project at sharply lower prices, reversing its previously stated policy of not cutting prices to compete. The developer is offering three units at 22 Tung Shan Terrace in Stubbs Road, Mid-Levels, at $7,984 per square foot - 38 per cent lower than that of its neighbouring project sold last March. SHKP property investment manager Victor Lui Ting said: 'The big price cut for this project is in response to the luxury residential sector dropping 20 per cent last year. 'We also want to speed up the sale, as the project is completed and there are only 16 units.' Mr Lui refused to disclose whether the company would sell other new residential projects at discounted prices. 'Every development has its individual marketing strategy,' he said. SHKP is one of the last developers to join a price war raging in the residential property sales market. Last month, the company witnessed a slow response to the sale of 112 units in its Symphony Bay development in Ma On Shan, which were released at an above-market price of $7,400 per sq ft. Analysts expected SHKP to reduce prices if it wanted to speed up sales of Symphony Bay, given the current negative market sentiment. Mr Lui said the company would generate $200 million in sales revenues if all 16 units at 22 Tung Shan Terrace sold. The fall in luxury property prices has had an effect on the sales of SHKP's projects. Mr Lui said one buyer defaulted on the purchase of a unit at 18 Tung Shan Terrace several months ago. The unit was later put on the market and sold at about $13,000 per sq ft, he said. Mr Lui said SHKP had received requests from three to four buyers of its luxury project at 3 Repulse Bay Road asking for postponement of the completion date. 'Their reasons are [they are] having problems in getting financing,' he said. About 90 per cent of buyers had completed their purchases at the Repulse Bay project, he said. The three units at 22 Tung Shan Terrace are being offered through Jones Lang Wootton. The units measure 890 to 1,211 sq ft and are priced at $6.67 million to $9.91 million each. SHKP will offer a second mortgage, through its subsidiary Honour Finance Co, of up to 15 per cent of the unit price at 1.75 per cent above prime rates. Midland Realty (Happy Valley) assistant general manager Ivan Chen Kun-wah said the selling price was reasonable for end users, as the average secondary transaction price was about $7,000 to $8,000 per sq ft. He said the area was very quiet, with only a handful of transactions in the secondary market.