Hong Kong property

Hong Kong’s first home sale of 2018 poised to sell out as buyers get in ahead of mortgage increase

Buyers reserved 140 of 160 available units as at 9pm Saturday, agents said, adding that the remaining units are likely to be snapped up

PUBLISHED : Saturday, 17 March, 2018, 4:00pm
UPDATED : Wednesday, 04 April, 2018, 10:39am

Wheelock & Co., which last week kicked off Hong Kong’s first large-scale sale of residential property this year, is poised to extend the success of its campaign for the second week running.

A third batch of the developer’s Malibu apartment complex at Lohas Park in Tseung Kwan O, totalling 160 units, sold out on Friday for a total HK$1.37 billion (US$174.7 billion), or an average price of HK$15,827 per square foot after discounts, 7 per cent higher than two earlier batches a week earlier.

Another 160 units offered on Saturday received bookings for 140 units, or 87 per cent, as of 9pm, sales agents said. The remaining 20 units are expected to be snapped up, they said.

The Malibu complex, comprising 1,600 apartment units, is expected to turn Lohas Park into Hong Kong’s largest residential enclave, with an estimated 58,000 residents accommodated in 21,500 flats, when the project is completed in 2025.

So far, Wheelock has posted HK$7.77 billion in revenue from selling 910 units in three batches.

Sales had been brisk on Friday and Saturday, with 5,000 buyers registering to bid for 320 units over the two days, or an average of 15 buyers for every available flat.

“The sale is supported by strong demand from owner-occupiers and long-term investors,” said Louis Chan Wing-kit,Asia-Pacific vice-chairman of residential property at Centaline, whose agents helped 10 customers book two units each for about HK$20 million. “The market still has plenty of liquidity.”

Hong Kong’s home prices had been on a tear, rising for 10 consecutive months to a record in January, as homebuyers and investors piled into the market ahead of higher interest rates which had been signalled by the government.

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With US interest rates likely to rise by another 25 basis points next week during the US Federal Reserve’s March 21 meeting, Hong Kong is likely to follow in lockstep by raising interest rates. Still, the city’s mortgage rates are likely to remain unchanged for a few more months, while a widening gap between US and Hong Kong rates exacerbate the carry trade that weakens the local currency, prompting more investors to seek safe haven in real estate for their wealth.

Residential property prices have another 10 per cent to 20 per cent to rise in 2018, according to a forecast by real estate consultancy JLL.

That has helped the bottom lines of the city’s property builders including Wheelock, CK Assets and Sun Hung Kai.

Wheelock’s 2017 underlying profit,which excludes revaluation gains from investments, rose 1.5 per cent to HK$12 billion, while its property sales revenue jumped 18 per cent to a record HK$26.1 billion, according to a March 11 stock exchange filing.