Developer happy to wait for a while before selling the 44 remaining houses at its Regalia Bay project REGAL HOTELS International will moderate the marketing for the remaining houses at its Regalia Bay development in Stanley to take advantage of an expected rise in prices. Since it was launched last year, the project has seen increasing interest from end-users and investors, and prices have risen steadily. The company's executive director, Donald Fan Tung, said 95 houses had been sold since last year's launch, generating proceeds of more than $4 billion. With only 44 houses unsold, he said the group would prefer to take its time. 'Local interest rates are heading downwards, which should be positive for the market sentiment. We highly value the property and hope to sell at the most satisfactory prices,' he said. The tight supply of luxury property on Hong Kong Island has boosted his confidence in the market's prospects. 'We face no pressure to sell the remaining units hastily. In fact, we are not holding a large stock of property for sale. Luxury prices are poised to rise further. Our marketing progress, will, to a certain extent, depend on the price movement.' The newly completed Regalia Bay on Wong Ma Kok Road is a joint venture between Regal Hotels and China Overseas Land and Investment. The companies bought the site for $5.5 billion at a government auction during the 1997 market peak. This substantial investment turned into a financial burden following the property slump, but the sharp market turnaround since last year has provided a much-needed opportunity to cash in. The project comprises 139 three-storey houses of about 4,000 square feet to 10,000 sq ft each set in four rows on a slope with unobstructed views of Stanley Bay. The houses come in four designs of different sizes and layouts, categorised A to D. In line with the property market rally, house prices in Regalia Bay have risen sharply over the past 12 months. Mr Fan said houses in the development had sold at prices of between $8,500 per sq ft and $16,500 per sqft over the past year. Type A houses in the development were recently sold for an average of $12,000 per sqft, compared with $8,000 per sqft at the initial launch, he said. Type B houses were selling for $12,700 per sqft, compared with $8,800 a year ago. Type C and D houses were going for an average of $13,000 per sqft and $16,500 per sqft, respectively, against $8,300 and $13,000 previously. Mr Fan said the company had recently sold a Type B house for $52million and a Type C house for $55million. One buyer had paid $80 million for a Type D house. While strong market sentiment had boosted sales at Regalia Bay, buyers were also drawn by the project's unique design, he said. 'The design is well thought out and all houses have sea views. The inclusion of two en-suite master bedrooms in a house makes the project unique in Island South,' he said. Buyers liked the spacious interiors, large gardens and open spaces. The clubhouse has more than 30,000 sqft of amenities including a swimming pool, a squash court, a gym, a play area and function rooms. While local buyers have dominated, Regalia Bay has attracted some buyers from the mainland and overseas, including from the United States, South Korea, Taiwan and Singapore. A Taiwanese fund had acquired 10 houses for long-term investment and a Singaporean fund had bought two houses, he said. Mr Fan said speculators were bidding to make a short-term profit but they constituted only a small number of buyers. Dismissing claims of a potential mini-bubble in the luxury property market, he said luxury residential prices were still some way off the peak level of 1997, despite the rally over the past year. Luxury flats at Pacific View in Tai Tam now sold for an average price of $9,000 per sqft, compared with as much as $16,000 per sqft in 1997, he said. 'People have been misled by the extraordinary sales in the primary market. While selected new projects have [gone for] record prices at recent launches, they represent a small number for the whole market.' He expected interest rates to remain at low levels for some time, supporting further growth momentum in the market. 'In 1997, the mortgage borrowing rate was more than 12 per cent a year against a yield of 2 per cent for property investment,' he said. '[Now] the borrowing cost is only between 2 per cent and 3 per cent, compared with a yield of about 3 per cent for quality properties.' With investment returns high enough to cover borrowing costs, investors had been encouraged to enter the market to benefit more substantially from future price appreciation, he said. Strong overseas currencies were another draw, he said.