YoHo Town sales spur property counters
Property stocks rebounded yesterday following news that Sun Hung Kai Properties, the territory's biggest real-estate company by sales, had sold more than half of a residential development at the weekend.
The share price of Sun Hung Kai soared 5.4 per cent, while Henderson Land, the city's third-biggest developer, leapt 6 per cent and Cheung Kong (Holdings), Hong Kong's largest developer by market value, jumped 1.92 per cent. The Hang Seng Property Index rose 3.66 per cent as all six members made gains.
Sun Hung Kai sold 800 of the 1,404-apartment project in YoHo Town, Yuen Long, for an average $2,200 per square foot. The developer priced the first 16 units at $1,560 per sq ft, about a fifth less than neighbouring rival projects.
However, property analysts were sceptical whether the sales represented a turning point for the battered sector. 'One good weekend doesn't solve the oversupply problem,' an analyst at a European brokerage said.
He said the Yuen Long project was one of the most heavily marketed schemes Hong Kong had seen. Some estate agents claimed the number of units sold was closer to 600 than 800, he said. The analyst said property counters were likely to slump again by the end of the week and that flat prices were likely to remain weak.
Daiwa Institute of Research property analyst Jonas Kan said clever marketing was behind the brisk weekend sales and that Sun Hung Kai had priced the first 16 units cheaply to seize attention.
Eric Yuen, head of research at Dao Heng Securities, said property firms had rebounded because the market was speculating that Chief Executive Tung Chee-hwa might step down in the near future and a new leader might do a better job in arresting the property slump.