Flat launches will give Hong Kong housing market a boost, analysts say
Sales at new projects like SHKP's Wings II will help sentiment ahead of policy address, analysts say
Upcoming flat launches are expected to give the local home market a boost amid improved buying sentiment after the Christmas and New Year's holiday break, say agents and property analysts.
Property analysts are upbeat about the sales of Sun Hung Kai Properties' the Wings II, a 780-flat residential project in Tseung Kwan O, which goes on sale this week. The price list for the project was released on Friday, making it the second large residential project to post a price list since the government introduced measures in October last year to slow house-price increases. Among the measures was a 15 per cent buyer's stamp duty.
The price list released on Friday by SHKP puts the average price on the first batch of 50 flats to be released at The Wings II at HK$10,688 per square foot on a gross-floor-area basis, about one-third less than it originally hoped to receive.
"The developer has been very smart," said Credit Suisse analyst Joyce Kwock.
"It has chosen the right window to launch the project, before the policy address [due on January 16, when the government may announce further measures to cool the market down]; and also before Chinese New Year [on February 10, when the market will turn quiet]."
Kwock added that the prices posted by SHKP seemed to be reasonable because they did not represent a big premium or a discount on prices currently being paid for secondary flats in the area.
"These flats look cheaper than the inaugural 50 flats sold in the project's first phase, but in fact they are not. The first 50 flats in the first phase were all located above the 30th floor, so the prices were higher. This time they include flats located on lower levels. So it's a smart pricing strategy."
Kwock said when the first phase was launched in 2011 the market outlook was clouded by concerns over the euro-zone debt crisis. Even so, the flats sold out in about one month.
After the introduction of a third round of quantitative easing measures in the US and a resulting improvement in the economic performance of European economies as well as the mainland economy, the second-phase release could now prove as successful as the first phase, with all flats sold in about two months, she said.
Nicole Wong Yim, regional head of property research at brokerage CLSA, said the recent strong performance of the stock market would have boosted home-buying sentiment. The second-phase release of flats at the Wings - which is located in an area favoured by both local end-users and upgraders - could therefore attract enough buyers.
UBS analyst Eva Lee said sales at the Wings II should be better than sales at One West Kowloon, developed by Cheung Kong, where sales were slow in the aftermath of the new housing curbs. This was because the latter was launched in December, a little more than a month after the implementation of the buyer's stamp duty.
In addition, she said, sentiment in the secondary market had improved since December.
"If sales at the Wings II turn out to be good, this will stimulate the home market," Lee added. "If not, the secondary market may cool down a bit and developers may slow their launches."
Another project - High Place, Henderson Land Development's 76-flat single block in Kowloon City - had seen more than 30 flats sold since the project was launched on Saturday, an agent said.
In the secondary market, meanwhile, there were 262 flats sold in the 50 largest housing estates tracked by Ricacorp Properties during the week from December 31 to January 6 - a 12-week high and an increase of 43 per cent over a week ago.