More housing projects to be launched to ride wave of demand

Homes sales propped up by discounts and subsidies offered by property developers

PUBLISHED : Tuesday, 08 April, 2014, 2:48pm
UPDATED : Wednesday, 09 April, 2014, 2:43am

Hong Kong's primary residential sector remains the focus of market attention, as more developers are expected to launch developments as sales gain momentum.

Sun Hung Kai Properties, Cheung Kong and New World Development are planning to release their projects soon, before buying demand dries up.

Over the weekend, 38 new flats were sold, 85 per cent fewer than the 256 sold the previous weekend, while 133 units, down 27 per cent from the previous week, were sold at the 50 largest residential estates tracked by Ricacorp Properties.

The 38 new flats were the remaining units from Ocean One in Yau Tong, Visionary in Tung Chung and Summa in Sai Ying Pun.

"There were fewer transactions because fewer new projects were put on sale over the weekend," said Patrick Chow, head of research at Ricacorp.

Sales in the primary market the previous weekend had been dominated by the first batch of 216 flats at Cheung Kong's Trinity Towers in Sham Shui Po.

On Friday, the second batch, of 93 flats, were sold in less than two hours.

Chow said sales of new homes have received support at current price levels because developers were offering discounts and tax subsidies to homebuyers.

Patrick Wong, director of property research at BNP Paribas Securities (Asia), expects more developers, such as SHKP and New World, to launch new projects this month.

"The key focus will remain Cheung Kong's three large-scale launches, with the 1,717-unit City Point in Tsuen Wan likely to be next," he said. The other two are Mont Vest in Tai Po and Lohas Park Phase 3 in Tseung Kwan O.

Alva To, managing director for Hong Kong and head of consulting for North Asia at property consultancy DTZ said prices of luxury homes could soften more than those in the mass residential market.

"In the face of the continuous offering of incentives by developers of primary projects and more recent market developments - such as the enactment of the buyer stamp duty bill, the looming rate increase in the US and a large supply of mass residential this year - landlords in the high-end sector … would have to be realistic in pricing should they need to sell their properties," To said.

The market's outlook has become clearer, as owners and prospective buyers have a better grasp of the market now, he said.