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Peggy Sito

Developers are in a rush to sell larger homes to middle-class buyers reaping from a stock market that has rallied to a seven-year high and is expected to rise further.
Given the prolonged low interest rate environment and a short supply of upmarket houses, analysts expect prices of luxury homes to rise faster than those of mass housing estates this year.
"This growth in net worth translates directly into growth in [home] demand," said Nicole Wong, a regional property research head at CLSA, alluding to the explosive increase in the value of stock holdings in recent weeks.
The stock market's benchmark Hang Seng Index has risen 19 per cent in the year so far.
High net-worth individuals were now expecting longer period of near zero interest rates, and that increased their appetite for real assets, Wong said.
Sales of luxury projects have become more active recently. One example is the sale of eight of 12 units at 50 Stanley Village, developed by Sun Hung Kai Properties, in the past few weeks.
In view of the favourable market environment, Sino Land said it hoped to sell 19 units at Providence Bay in Tai Po today. The size of the units ranges from 1,385 to 1,566 sq ft and they are priced between HK$16.65 million and HK$26.8 million.
Sino Land will offer buyers a maximum discount of 12.5 per cent.
The developer has also started the sale of its Botanica Bay development in Cheung Sha on Lantau Island. The project has 16 houses of 3,725 to 5,573 sq ft, one of which was recently sold for HK$109 million.
Swire Properties said it would sell six units ranging in size between 4,819 and 5,444 sq ft at the super deluxe residential block Opus in Mid-Levels on Monday. The price of each unit ranges from HK$385 million to HK$520 million.
CSI Properties is planning to sell its luxury property, kau to Highland, in Kau To Shan, Kowloon, in two weeks.
SHKP is also planning to offer its luxury development Ultima in Ho Man Tin, while Cheung Kong (Holdings) is believed to be launching its Stars By The Harbour, in Hung Hom.
Hang Lung Properties is also set to sell its 18-house development at Blue Pool Road, Happy Valley.
"The undersupply of land for large homes will be reflected in the market soon," said Vincent Cheung Kiu-cho, the head of valuation advisory services for Greater China at property consultant Cushman & Wakefield. "It is anticipated that the price growth of large homes will exceed that of small homes to catch up with the accumulative growth of the small homes in the past year."
Prices of small homes rose 13.6 per cent in the second half of last year, while those of large homes grew 7.3 per cent, according to the home indices of Centaline Property Agency.
However, small homes saw growth slow to about 3 per cent after the government imposed new mortgage measures in February, while the capital value of large flats rose 3.5 per cent, the data showed.
According to Wong, rallies in the stock market are followed historically by a surge in property transactions.
However, the correlation had weakened since the introduction of the various stamp duties, she said.
Assuming just 0.1 per cent of the estimated 1.8 million retail stock investors who got a windfall from the market are wooed into buying a property, there will be an additional demand for 1,800 homes, according to a CLSA report.
The investment bank forecasts mass housing market prices to rise 4 to 6 per cent this year and luxury houses to increase 7 per cent.
Nicholas Brooke, the chairman of Professional Property Service Group, said there might be some reallocation of buying from mass housing to high-end homes.
"Investors seek to cash in and place some of the gains they have achieved in the stock market, particularly bearing in mind that the competition for small units is very fierce," Brooke said.


Hong Kong developers rush to sell larger homes as middle class reaps from stocks boom

Developers have stepped up plans for luxury home launches following the strong rally in the stock market.Photo: Reuters

Business

Property

Hong Kong & China

Luxury homes being rushed to market to meet expected demand from investors reaping from equities that have soared to seven-year highs


Developers are in a rush to sell larger homes to middle-class buyers reaping from a stock market that has rallied to a seven-year high and is expected to rise further.


Hong Kong developers rush to sell larger homes as middle class reaps from stocks boom

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Luxury homes being rushed to market to meet expected demand from investors reaping from equities that have soared to seven-year highs

Luxury homes being rushed to market to meet expected demand from investors reaping from equities that have soared to seven-year highs