Hongkongers spoilt for choice in Lohas Park, as developers offer lower prices for new projects to counter interest rate rises

If developers are willing to adjust, they can absorb demand amid rigid secondary market prices, Centaline executive says

First batch at Villa Garda I has been priced 14 per cent below the initial launch price of the Manor Hill project, which was launched in October last year

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The Villa Garda I project in Lohas Park. Its launch came as the one-month Hibor, to which mortgage plans are frequently linked, rose to 0.71 per cent on Wednesday. It has risen for 12 consecutive trading days and hit its highest level in more than two years on Wednesday. Photo: Sun Yeung

Published: 9:30am, 23 Jun 2022

Homebuyers in Hong Kong are spoilt for choice in Lohas Park, the city’s largest residential enclave, where developers are dropping prices for new projects to drum up sales amid rising interest rates at home and abroad.

Villa Garda I in Lohas Park, which has been developed by Sino Land, K Wah International and China Merchants Land, for instance, has priced a first batch of 128 flats at HK$17,888 (US$2,279) per square foot on average, according to a spokeswoman.

The average price for the project, which sits atop The Lohas, a shopping centre, is 14.5 per cent below the initial launch price of HK$20,921 per square foot on average at Kowloon Development’s Manor Hill project, which was launched nearby in October 2021, before interest rates rose. The price for Villa Garda I is closer to the levels seen during the launch of LP10 in September last year, which was priced at HK$17,463 per square foot.

“After the US raised interest rates earlier this month, there have been signs of a slowdown in property transactions, especially second-hand transactions,” said Louis Chan, Asia-Pacific vice-chairman and CEO of the residential division at Centaline Property Agency.

“The market adjusts prices immediately, but second-hand property owners’ asking prices are relatively rigid. If developers are willing to make adjustments, they can absorb the purchasing power of the market,” he added.

Villa Garda I’s launch came as the one-month Hong Kong Interbank Offered Rate (Hibor), to which mortgage plans are frequently linked, rose to 0.71 per cent on Wednesday. It has risen for 12 consecutive trading days and hit its highest level in more than two years, since June 9, 2020.