Hong Kong property

Tsuen Wan flat sales rise after waterfront site goes for high price

Bargain hunters are swooping on flats in the area after a high price is paid for 'TW6' site

PUBLISHED : Wednesday, 30 January, 2013, 12:00am
UPDATED : Wednesday, 30 January, 2013, 4:07am

Home sales volumes in Tsuen Wan were boosted last week by bargain hunters betting that the high price paid for a waterfront site in the area would drive flat values higher.

The district was put under the spotlight when Vanke Property (Hong Kong), a subsidiary of the mainland's largest developer, China Vanke, joined local developer New World to buy the "TW6" site near Tsuen Wan West MTR Station for HK$3.43 billion, or HK$5,088 per buildable square foot last Wednesday.

The TW6 site could provide a total gross floor area of 675,000 square feet. The winning bid was 10 to 27 per cent higher than analysts' estimates, which ranged from HK$2.7 billion to HK$3.12 billion.

It was also 18 per cent higher than the HK$9.63 billion, or HK$4,308 per buildable sq ft, paid in August by Cheung Kong for the adjacent TW5 site.

Agents said the favourable land sale result triggered a 20 per cent jump in the number of transactions in Riviera Gardens and Luk Yeung Sun Chuen versus the previous week's sales.

"Existing home owners responded to the increased demand by marking up the asking prices of their flats by three to five per cent," said Dennis Chow, a sales manager at Midland Realty's Tsuen Wan branch. Prices of around HK$6,500 per square foot at Riviera Gardens - a 23-year-old development close to the TW6 site - were now considered to represent a bargain, he said.

"Once it is developed, flats on the TW6 site would have to sell for HK$8,000 per sq ft in order to cover costs. Therefore, secondary transaction prices at Rivera Garden were considered to be attractive by both end users and long-term investors."

Some buyers were willing to increase their offers by three per cent or more to match the increases sought by sellers and deals were now being sealed faster.

A 696 sq ft flat in Riviera Gardens with full sea view sold for HK$4.7 million, Chow said, which was HK$150,000 higher than the vendor's original asking price of HK$4.55 million.

"It was a new high for transaction prices in the estate," he said.

C.Y. Fung, an executive at an airline company, bought a 562 sq ft flat at Riviera Gardens in June for HK$2.8 million, or HK$4,982 per sq ft in terms of gross floor area. Based on the current average price of HK$6,500 per sq ft in the estate, her flat has appreciated by more than 30 per cent so far, but she says she has no plan to sell it to gain from the rising prices.

"The unit is now leasing for HK$9,800 per month. I will not sell it unless I get an offer I cannot resist," she said.

Christina Chan Chung-yin, sales manager at Centaline Property Agency's Tsuen Wan branch, said the Luk Yeung Sun Chuen estate adjacent to Tsuen Wan MTR station also benefited from the positive land sale outcome.

"About a third of the latest buyers at the estates were local residents who decided to buy another flat either to lease out or to give to their children," she said.

An investor bought a 518 sq ft flat at Luk Yeung Sun Chuen with a lease that generates HK$10,050 a month for HK$4.15 million she said.

The price was HK$70,000 higher than the vendor's original asking price of HK$4.08 million.