Sun Hung Kai Properties adopts premium pricing strategy for Regency Bay, tags it 40 per cent higher than new projects in Tuen Mun
- Regency Bay residential development in Tuen Mun is priced at HK$17,377 (US$2,241) per square foot after discount
- Flats at Wing Tai Properties’ Oma by the Sea, launched in May, are 38.5 per cent cheaper than Regency Bay
The developer has priced the first batch of 88 flats at its Regency Bay residential development at HK$17,377 (US$2,241) per square foot after discount, the highest among new projects launched in the district recently. Prices start at HK$4.68 million after discounts for a flat measuring 261 sq ft. SHKP has yet to announce the sales launch date of the flats.
“The developer is testing waters [as] it is the first new project priced amid the third wave of coronavirus outbreak,” said Louis Chan, vice-chairman of Asia-Pacific and chief executive of residential division at Centaline Property Agency. “The pricing of the first batch is aggressive.”
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Meanwhile, used homes in Tuen Mun average HK$11,738 per square foot, about 48 per cent cheaper than Regency Bay, according to Centaline.
The price reflects the seaviews from the project, said Amy Teo, general manager of Sun Hung Kai Real Estate Agency. She added that she was not worried about the sales as many of the developments in Tuen Mun are old.
But the success of SHKP’s strategy remains to be seen as Centa Valuation Index, which reflects banks’ sentiment on the housing market, softened 6.9 points to 46.09 this week. The lower the reading, the more bearish banks become of prospects in the real estate industry, and are more likely to cut their valuations of mortgaged property.
Before SHKP launches Regency Bay, CK Asset and China Evergrande will be selling 180 flats at Seaside Sonata in Sham Shui Po and 83 flats at The Vertex in Cheung Sha Wan, respectively, on Friday.
“Although there is recovery in the residential market, the uncertainties in the property market remain,” said Joseph Tsang, chairman and head of capital markets at JLL in Hong Kong. “The city is now facing the third wave of Covid-19 infection and decreasing capital inflow from mainland China into Hong Kong’s real estate market. Economic recession and rising unemployment rate will weigh on housing prices.”
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Tsang added the pent-up demand that supported property sales in the last few months has gradually faded, creating a fresh challenge for developers, especially with the pandemic raging now.
According to JLL, Hong Kong’s home prices are unlikely to grow at rates seen after the 2008 financial crisis because of the Covid-19 outbreak, contracting economy, rising unemployment, and tightened capital control from mainland China.
The property consultancy now expects mass housing prices to drop 5 to 10 per cent this year and luxury housing prices by 10 to 15 per cent.