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SCMP Reporter

THE first flats in the final phase of the South Horizons development in Ap Lei Chau are to be offered at $5,112 a square foot gross - down 10.3 per cent from the price set in March.

  The development is the first major sale of new flats since the Government released its measures aimed at cooling the property market.

  The price cut was in line with the fall in price in the secondary market, property agents said.

  As well as cutting the price, the sales agent, Hutchison Whampoa Property, will restrict supply to just 80 units, against previous releases of typically 200 or 300 units.

  It would attempt to attract buyers with access to 85 per cent mortgages, said Tso Kai-sum, the company's managing director. The company is selling the units on behalf of the developing consortium.

   Mr Tso said the limited sales would test the water after recent market uncertainties, although overall, he said, ''I am very confident''.

  He added that the Government's measures were ''not so harsh''.

  ''By and large prices are quite stable,'' Mr Tso said, ruling out any possibility of a price collapse.

  In spite of the price falls over the past three months, buyers who bought flats in phase three 12 months ago are still enjoying a healthy paper profit of more than 50 per cent over their own purchase price of $3,300 a square foot gross, thanks to last year's explosion in property prices.

  The latest batch is to receive extensive promotion, including a direct mail campaign. Buyers will get a free refrigerator and washing machine and improved fittings.

  The limited supply appears to be an attempt to ensure a high benchmark is set in anticipation of larger releases later.

  Mr Tso said improvements to the road and bridge linking Ap Lei Chau to Hong Kong Island would improve the attractiveness of the development for commuters.

  Internal sales, which have been much criticised by the Government, have been kept to below 10 per cent of the total.

  Danny Chan, manager of the South Horizons branch of Centaline Property Agency, said a 10 per cent adjustment was reasonable in the prevailing market conditions.

  Although the sale price was not released until after the market closed, Mr Tso said the price would certainly be lower than the previous release.

  The Hang Seng sub-index of property stocks closed the day down 1.77 per cent at 15,094.99 points although analysts said the details of the South Horizons sale were only one of many factors depressing the market.

  Mr Tso said he was confident of the long-term future of the property market because of the limited supply of land and rising demand, including increasing immigration from China.

  Although the Government's measures affected the psychology of the market, only changes to the supply of land would have a long-term effect, he said.

  This final phase of the South Horizons project is the fourth, which consists of 10 blocks with a total of 2,520 flats of 654 to 950 sq ft.

  The development is a joint venture between four companies: Hutchison Whampoa, Cheung Kong (Holdings), Cavendish International Holdings and Hongkong Electric Holdings.



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