Source:
https://scmp.com/news/hong-kong/article/1853726/market-turmoil-slows-sales-flats-hong-kong-residential-project
Hong Kong

Sales of new flats at Hong Kong residential project slow amid stock market turmoil

Developer sells just over half the units despite generous mortgage offer, but says the result is within expectation given market conditions

Potential buyers study the details before deciding whether to buy a flat at Aspen Crest in Diamond Hill.Photos: Edward Wong

The precarious stock market has dampened sentiment among property investors, as the latest residential project launch yesterday received a lukewarm response.

Just over half of the new homes at a project in Diamond Hill, developed by Far East Consortium International, found buyers at prime sales time.

The Aspen Crest project, which features small units such as studios and one-bedroom flats with an area between 198 and 381 square feet, sold 130 units as of 6pm yesterday. Another 104 units were not sold.

"At a time of uncertainty in the stock market and the release of several other new projects, we find the sales result within expectation and encouraging," Far East said in a statement.

One-bedroom flats were the most popular, with 80 per cent being sold, added Far East, which netted HK$520 million from the 130 flats.

Another sales session would start at 3pm today for the remaining flats on a first-come, first-served basis, the developer said in its statement.

To sweeten the deal, Far East could provide a second mortgage loan worth 30 per cent of the total purchase value, in addition to a 60 per cent primary mortgage extended by banks. This means home seekers need to put down as little as 10 per cent before moving into a new flat.

Still, such measures failed to boost sales as stock market worries weighed on investors. "The sales result is reasonable given the recent market sentiment," said Sammy Po Siu-ming, chief executive of Midland Realty's residential department.

"The stock turmoil has clouded investors' decisions and their judgment of whether it is a good time to put a major stake in property," said Po, who estimated 70 per cent of sales went to first -time buyers.

Louis Chan Wing-kit, a managing director at Centaline Property Agency, echoed this view. "It could have been a near sell-out if it weren't for the confusing directions in the stock market and a slew of other projects released at a similar time. In view of these adverse factors, the sales were not bad," Chan said.

Chan estimated around 10 to 20 per cent of prospective buyers were discouraged as a direct result of the market turmoil.

Both Hong Kong and mainland stock markets staged erratic swings this week. Fresh interest rate cuts by the mainland central bank failed to reverse losses accumulated from sharp declines on Monday and Tuesday.