Hong Kong housing market fails to pick up in Year of the Pig, as low prices fail to woo buyers
- Sino Land sells only four out of an available 129 units at its Mayfair by the Sea 8 project on Friday
- 46 out of 82 micro apartments sold at Magic Sight Holdings’ AVA 228 development
The Hong Kong housing market has made a slow start to the Year of the Pig. On Friday, Hong Kong developer Sino Land sold only four out of an available 129 units at its Mayfair by the Sea 8 project in the New Territories.
While three apartments were sold through tender, only one 685 sq ft unit was sold for HK$9.99 million (US$1.27 million), or HK$14,588 per square foot. The price, on a per square foot basis, was 22 per cent below the price for Sun Hung Kai Properties’ The St Martin development – about a 10-minute walk away – which sold in July last year.
“It is really bad,” said Alvin Cheung Chi-wai, associate director at Prudential Brokerage. “Now cheaper prices are not enough. You have to be much cheaper to match public expectations.”
Local developer Magic Sight Holdings’ AVA 228, a micro apartments project in Sham Shui Po, had sold 46 units out of a total of 82 apartments by 9pm.
The developer, a privately held firm owned by property investor Lo Wah, has priced the smallest of an initial batch of units, measuring 151 square feet, at HK$2.8 million, or at HK$18,563 per square foot, according to a price list released by the company on Thursday.
You have to be much cheaper to match public expectations
The apartments were the most affordable available in the market since February 2016, when a 299 sq ft flat at Sun Hung Kai Properties’ Twin Regency in Yuen Long was offered for HK$2.8 million.
A low-price strategy, which has been in effect since December, has failed to woo Hongkongers amid a softened housing market.
In December, Sino Land was the first in the city to offer steep discounts, selling its Grand Central development in East Kowloon at a 14 per cent discount. More than 90 per cent of all apartments on offer were quickly sold. Two hundred and eighteen out of 288 units were sold at Mayfair by the Sea 8 when the development first debuted on January 29.
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“Buyers are waiting for cheaper flats and just do not want to jump into the market before they can see clearly where the market is heading to,” said Derek Chan, head of research at Ricacorp Properties. “Poor responses from property sales may push more developers to provide larger discounts.”
Hong Kong home prices tumbled by 9.2 per cent between August and December last year, amid headwinds that ranged from rising mortgage rates, a cooling economy and uncertainties around the US-China trade war.
Home builders could also face pressure to slash prices as the number of completed but unsold new apartments increased by the end of last year.
The city’s developers held 3,295 unsold homes, which were completed in 2017 and 2018, as of December, according to Centaline Property Agency.
