New World Development launches mega Hong Kong project at lower-than-expected prices, as Covid-19, recession weigh on market
- First batch of 180 units will be offered at prices ranging from HK$6.3 million to HK$19.9 million each
- Poor economic performance, rising unemployment will force developers to price new flats at lower prices: analyst
“Poor economic performance and rising unemployment will definitely force developers to price new flats at lower prices,” said Vincent Cheung, managing director at Vincorn Consulting and Appraisal.
Cheung said he expected unemployment to rise to 7 per cent in coming quarter. “We can tell many white-collar workers are worried about their jobs. Those who can still afford to buy, will be price sensitive,” he said.
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The price list for the first phase of The Pavilia Farm also comes ahead of a policy address by Hong Kong leader Carrie Lam Cheng Yuet-ngor, who is widely expected to address the city’s housing shortage next Wednesday, potentially increasing flat supply.
“The Covid-19 outbreak has not been resolved yet and everyone is worried about the economy. The developer is worried that if it sets too high a price, it will not make many sales,” said Derek Chan, head of research at Ricacorp Properties. “It is better to price flats cheaply and drum up some sales. It is the best way for such a mega project,” he added.
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The Pavilia Farm, which is coming up atop Tai Wai MTR station, will have 3,090 units in total, which will be developed in several phases. The first phase will have 783 units. The development will also have a 650,00 sq ft shopping centre, the biggest in eastern New Territories.
Vincorn’s Cheung said the project will serve as a benchmark for other developers, as it is a large residential project atop a railway station. Travelling time from Tai Wai to Admiralty will be cut to 30 minutes by the Sha Tin to Central Link, which is expected to open in 2022.