Analysts more conservative on high-end launches in Hong Kong market
Analysts have taken a more conservative view on upcoming high-end launches after Sun Hung Kai Properties' prompt action to relaunch its residential project at discounted prices.
Sun Hung Kai Properties' relaunch of The Cullinan in Kowloon Station pre-empted the launch of The Austin development above Austin Station, a joint venture between New World Development and Wheelock, according to analysts.
"As they are similar in locations and target buyers, the competition for attracting a limited pool of investors will mean a stronger wait-and-see attitude to be observed," said Venant Chiang, an analyst at Jefferies in its latest research report.
"We turn more conservative on upcoming high-end launches, such as The Summa by Kerry Properties, and The Avenue by Sino Land & Urban Renewal Authority," he said in the report.
On Sunday, Sun Hung Kai announced the price list of 181 flats at The Cullinan in West Kowloon. with an average selling price of HK$29,098 per square foot of saleable area. It also introduced incentives such as cash rebates of up to 14 per cent. Applying the discounts on the listed price, the average selling price is 19 per cent below the recently transacted average prices of homes in the secondary market. Sales of The Cullinan begin on Saturday.
Agents said hundreds of buyers, including those from mainland and corporate clients, had showed initial interest in the development.
"It is too early to predict the market outlook, given uncertainty over the sales response," said a property agent who asked not to be named.
David Chan, director of Ricacorp Properties, said the secondary market would face greater pressure as a number of new primary developments were set to be launched.
The number of luxury home sales would fall to below 30 deals this month, against 47 deals in September.