Centralcon’s Fo Tan housing project The Arles concludes with less than 2 per cent sold in latest offering
- The local developer controlled by tycoon Wong Kwong Miu sold only seven units in its latest round of sales consisting of 426 flats
- Experts said Centralcon’s disappointing sales does not suggest a sluggish property market, as buying desire has returned to Hong Kong
A little-known Hong Kong property developer sold less than 2 per cent of the flats available in its latest sale in the city, despite strengthening buying desire as the impact of the Covid-19 pandemic on the housing market eases.
Centralcon Properties, a local developer controlled by tycoon Wong Kwong Miu originally from Guangdong province, sold only seven units in its latest round of sales consisting of 426 flats in The Arles in Fo Tan on Friday, according to sources.
The developer, however, said the project pulled in more than HK$74 million (US$9.4 million) in one day and was satisfied with the sales result. Two of the units sold were sold by tender. It expected sales to be even better after the show flats were opened.
The price index for lived-in homes in April rose 0.5 per cent to 384, nearly the same level as February, according to data from the Rating and Valuation Department on Friday. It was the biggest monthly increase since the 1 per cent gain last July, although it was still 1.8 per cent lower than a year earlier.
The rise was higher-than-expected, said Martin Wong, director and head of research and consultancy for Greater China at Knight Frank. “The index will widen its increase in May, but the overall property price [index] in the first half will still see a slight decline.”
Some experts said Centralcon’s disappointing sales does not suggest a sluggish Hong Kong property market.
One of the reasons could be that most of the flats on offer were leftover stock, and buyers have become more selective because of the increase in new properties available, according to Sammy Po, CEO of Midland Realty’s residential division for Hong Kong and Macau.
“There is buying power. It depends on whether buyers can find the bargain projects they like,” said Po. “There will be some large projects. They can sell if prices are reasonable.”
The Arles, located near the Fo Tan subway station in eastern New Territories, offered three rounds of sales last October and November.
The city has seen a vast improvement in its Covid-19 situation since February, when it started recording an exponential surge in cases. On Friday, Hong Kong reported 250 new infections and one death, a sharp decline from the worst days in March, when more than 70,000 new cases were registered daily.
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Price is also a major factor leading to the slow sales at The Arles, according to Louis Chan, Asia-Pacific vice-chairman and CEO of the residential division at Centaline Property Agency.
“If [a project] is not cheap, nobody would buy it … That is the only reason,” said Chan, adding that the project might attract more homebuyers if the price could be 5 per cent lower than the current level.
The flats on sale at The Arles on Friday were priced at an average of about HK$22,700 per square foot, 20 per cent higher than the first batch sold last October, which started at HK$18,888 per square foot.
“The post-pandemic market is not yet stable. There have been good and bad [sales results]. If [the project] is cheap, it can sell 1,000 units. If it is not cheap, there will be few buyers. The limited number of buyers will go around” in search of bargains, said Chan.
