Larvotto to set luxury price benchmark in Island South

Sun Hung Kai Properties is to set a benchmark for a major luxury housing estate in Island South by releasing a project in Ap Lei Chau at an average price of HK$17,288 per square foot.

The first batch of 50 flats at Larvotto - a joint-venture development by SHKP, Kerry Properties and Paliburg Holdings - would go on sale on Saturday.

Prices of the flats, sized from 1,968 to 1,998 square feet, range from HK$31.11 million to HK$37.94 million, or between HK$15,811 and HK$18,992 per square foot.

'The launch price is a bit aggressive,' Paul Louie, the regional head of property research at Nomura International, said.

The asking prices are higher than the HK$9,500 to HK$16,000 per sq ft in the secondary market at the 2,746-unit Bel-air Residence in Pok Fu Lam, which is the most expensive large housing estate in Island South.

Louie believes the 715-unit Larvotto project would appeal to mainland buyers, who account for sales of more than 20 per cent of apartments worth more than HK$20 million.

It would be the first major development put on sale since the Hong Kong Monetary Authority told banks last October to reduce the amount they lend to buyers of luxury homes priced above HK$20 million from 70 per cent to 60 per cent of a property's value. The move followed a surge of about 40 per cent in prices in the luxury sector last year, driven by low interest rates, limited supply and money flowing in from the mainland.