Hong Kong buyers snatch up all flats on offer at Sun Hung Kai’s Novo Land ahead of city’s potential new prime rate increase
- Buyers snatched up all of the 170 units on offer at the Novo Land project in Tuen Mun just four hours after sales commenced on Saturday
- Speculation that major commercial banks, including HSBC and BOC Hong Kong, will push for a prime rate increase helped fuel demand
SHKP, the city’s biggest developer by market cap, sold all of the 170 units on offer at the second phase of its Novo Land project in Tuen Mun just four hours after sales commenced at 9am on Saturday, according to local real property agents and media.
“About 80 per cent of buyers [at Novo Land] are from the New Territories, and they are very positive on the outlook of the development in the northern part of the city,” said Sammy Po Siu-ming, chief executive at Midland Realty’s residential division. “Lots of people piled in today after they failed to buy flats during Novo Land’s previous launches.”
The average sales price at Novo Land was HK$14,780 (US$1,883) per square foot, representing a 5.6 per cent increase from the initial launch of the development’s second phase in August and a 12 per cent gain from its first-phase offer last month. The size of units at Novo Land range from 242 square feet (22.5 square metres) to 708 square feet, which translates to a price band of between HK$3.5 million and HK$9.8 million.
The strong demand for flats at SHKP’s development on Saturday reflects the city’s robust streak of weekend sales in August, as developers provided discounts to attract more buyers.
Meanwhile, the average sales price at Grand Victoria was HK$26,508 per square foot, implying a 7.7 per cent increase from the development’s previous launch in March. The size of flats in the project range from 278 square feet to 807 square feet, which shows a price band of between HK$6.5 million and HK$22.9 million.
While the Hong Kong Monetary Authority (HKMA) has raised its base lending rate – the borrowing cost charged on commercial lenders – each time the Fed tightened credit this year, HSBC and other note-issuing banks in the city have so far refrained from raising their prime rate, a move that analysts expect will erode margins.
Still, some economists predicted that the prime rate will rise by 25 basis points at the end of this year. The prime rate currently stands at 5 per cent at HSBC and its subsidiary Hang Seng Bank, as well as at BOC Hong Kong. Standard Chartered Bank and other local lenders have pegged their borrowing costs at 5.25 per cent.