Hong Kong home buyers thumb their noses at increased prices
Two property projects launched over the weekend reported worse-than-expected sales results, as their increased prices found few takers
Hong Kong’s home buyers are thumbing their noses at developers who are raising the prices of new apartments, snubbing two project launches over the weekend and leaving them with worse-than-expected sales results.
On Saturday, the second phase of the Alto Residences in Tseung Kwan O – launched with a 57 per cent price increase after the first phase – put customers off so much that the developer managed to sell only four of 42 units on offer. Alto Residences is a joint project between Lai Sun Development and former Sun Hung Kai Properties chairman Walter Kwok Ping-sheung.
A day later, K Wah International sold 23 of the 42 units offered at its K City project in Kowloon.
K Wah’s sales result “is not bad, but it certainly has slowed down a lot compared to the near sold-out results in previous launches”, Midland Realty’s residential department chief executive Sammy Po said. “Price increases through the several rounds of launches have something to do with it.”
K Wah last week priced the fifth batch of its 900-unit K City, located at the former Kai Tak airport site, at between HK$17,401 to HK$23,694 per square foot. The average price has been raised 11 per cent compared to the first batch a month ago. Alto’s price was 20 per cent over the price at comparable projects, Po said.
Some 584 units of the 598 units in the first four batches have been sold by March 7, according to a K Wah spokeswoman. She declined to comment on Sunday’s sales.
Positive market sentiment saw Cheung Kong Property, Sun Hung Kai Properties and Wheelock Properties unveil price lists for 2,408 units at their new projects last Thursday.
“After three new launches in March, we expect more to come in April,” Po said. “As long as they are priced at levels similar to, or lower than, market prices, developers should not have a problem in sales since secondhand flats supply is still tight.”
He said this week’s likely interest rate rise should have been “digested” by the market and should not be a big deterrent to sales.
The United States Federal Reserve will almost certainly raise rates on Wednesday US time, according to Bloomberg data on federal funds futures.
Home prices in Hong Kong, the least affordable city in the world, rose 10.75 per cent last year.