Cheung Kong is offering discounts of up to 11.75 per cent to sell its new residential project, Trinity Towers, in Sham Shui Po amid concern higher interest rates in the United States could lead to a decline in home prices. An increase in rates in the US would force Hong Kong banks to follow suit, which will result in higher mortgage payments, deterring homebuyers. To encourage sales, developers in turn would be forced to cut the prices of their projects. "Flat-owners would need to cut their asking prices in order to attract buyers. Homebuyers would take a longer time to make a decision as they need to consider the risk after interest rates rise," said Louis Chan Wing-kit, the managing director for residential sales at property agent Centaline. Chan said a rise in US interest rates might cause Hong Kong home prices to drop up to 15 per cent in the first four or five months of this year. Cheung Kong yesterday released the price list for the first batch of 108 flats at the 402-unit Trinity Towers. The average price is about HK$10,400 per square foot, about 13 per cent less than prices at nearby housing estates. The cost of the flats ranged between HK$3.7 million and HK$9.87 million, or HK$9,552 to HK$14,146 per square foot. Buyers can get a 5 per cent discount if they pay in cash and an extra 3 per cent discount if the transaction is made by April 30. There will also be a 3.75 per cent subsidy on stamp duties. After subtracting all the discounts, the minimum price of a one-bedroom flat with an area of 362 sq ft is about HK$3.26 million, or HK$9,010 per square foot, while a three-bedroom unit would cost at least HK$6.1 million, or HK$8,430 per square foot. Cheung Kong executive director Justin Chiu Kwok-hung said yesterday "it is our tradition to offer a lower price for the first batch of flats". The developer is targeting contracted sales of HK$30 billion for this year. "The asking prices of Trinity Towers are less than market expectations. It will attract homebuyers from the secondary market," said Sammy Po Siu-ming, the chief executive of Midland Realty. "As the price difference of new and second-hand homes has narrowed, more homebuyers would prefer new flats. "Sales of second-hand homes would be affected badly."
