Sino Land’s low-price strategy pays off as first batch of Grand Central flats in Kwun Tong is sold out
- Developer Sino Land sells all the 488 flats on offer in the first batch at its Grand Central project in Kwun Tong
- The project’s success comes only a week after another project in Tuen Mun sold just two flats
A low-price strategy has proved effective in attracting anxious buyers as a prime residential project generated the strongest sales since October amid a property market correction in Hong Kong.
In stark contrast to recent disappointing sales launches, buyers shrugged off the cold weather to snap up the entire first batch of 488 flats on offer at Sino Land’s Grand Central 1,999-unit development in Kwun Tong on Thursday.
“I’ve done some comparisons, and I found the price really attractive,” said Li, the first buyer of the project in East Kowloon.
Li, who did not give her first name, paid HK$16 million (US$2.05 million) for a three-bedroom flat.
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Sino Land offered an average discounted price of about HK$17,388 per square foot, 14 per cent lower than similar new project launches nearby.
For instance, a 504 sq ft unit at Vibe Centro by mainland developer Poly Property Group in Kai Tak, the site of Hong Kong’s former international airport, was sold at HK$11.71 million, or HK$20,300 per sq ft in November.
“The price we set is quite attractive and we hope it could be a Christmas gift to our buyers,” said Daryl Ng, deputy chairman of Sino Land.
Thursday’s sale attracted 7,758 prospective buyers to sign up for the first batch of 488 units on offer, meaning there were 88 bids for each flat.
After Thursday’s sell-out, Sino Land said they would put another 280 units on the market soon, and raise the average price by 2 per cent.
Richard Lee, chief executive at the real estate agency Hong Kong Property, said that as long as developers were willing to lower prices to a more reasonable level, there were still a lot of buyers who are waiting to enter the market.
A survey released by Citibank and University of Hong Kong on Thursday backed Lee, which said that fewer Hongkongers think the timing is not right to buy flats.
The study showed that 67 per cent out of 500 respondents said it was “a bad or terrible time to purchase” in the fourth quarter, 7 percentage points lower than the previous quarter.
The median cost of lived-in homes in Hong Kong has dropped by 3.7 per cent since August after rising for 28 consecutive months.
Investors fear that rising mortgage rates, a proposed vacancy tax, and the US-China trade war will further weigh on the city’s home prices.
As a result prospective buyers recently have been getting cold feet as they have witnessed extremely poor sales of new flats and second homeowners rushing to cash out.
A sales launch at the weekend in Tuen Mun had to close early when only two out of 27 units were sold at the T-Plus project. The flats each measured around 130 sq ft.
“There has been some correction in the last few months,” said Kevin Lau, senior economist for Greater China at Standard Chartered Bank, after a media briefing on Thursday. “In the coming few quarters, there is the risk of [further] downward adjustment.”
“Of course, I’m worried that the market will fall further. That is why I have waited for months,” said another buyer named Chan, who had queued up outside Grand Central’s sales office in Tsim Sha Tsui.
Chan, a clerk in her 40s who also did not give her first name, said that Grand Central was the first project that she had signed up for because previous flats put on the market were priced too high despite the so-called discounts.
“I don’t want to get myself in negative equity,” said Chan. “And even if the market continues to weaken, with this location and this price, I should be sitting pretty tight.”
Sino Land’s Grand Central project is part of the government’s redevelopment plan for Kwun Tong.
The urban renewal project aims to turn the former industrial area in Hong Kong’s East Kowloon district into a modern neighbourhood complete with stylish apartments and offices.