Positive sentiment bodes well for upcoming launches of new homes

The recent rebound in Hong Kong residential property prices and successful sales at new projects will release more pent-up demand in the market and benefit developers with upcoming launches, according to analysts.

The Centa-City Leading Index, which tracks second-hand home prices in 100 housing estates, rose 0.02 per cent week on week to 121.19, just 2 per cent below the all-time high of 123.66 in March last year.

The move capped a cumulative gain of 1.78 per cent since the beginning of the year and 3.42 per cent from the intrayear low of 117.18 in March, Barclays said.

But sales slowed in the primary and secondary markets following the rebound in the past two weeks.

According to BNP Paribas, 82 new homes were sold over the weekend, 52.3 per cent fewer than the 172 units sold over June 28-29.

In the secondary market, 20 units were sold over the weekend at the 10 largest residential estates tracked by Centaline, 11.1 per cent higher than the 18 units sold the previous weekend.

BNP Paribas analyst Patrick Wong said in a report that developers have reaped successful sales over the past few weeks. For example, of 691 units at The Grand Austin, owned by Wheelock, New World Development and MTR Corp, more than 500 units were sold for a total of about HK$10 billion in the past 16 days.

Wong said market response remains positive, and that would benefit developers with launches in the pipeline.

Two projects, including Cheung Kong's Mont Vest Phase 1 (1,071 units) in Tai Po and Hong Kong Ferry's Metro6, a 95-unit development in Hung Hom, are likely to be launched over the next few weeks.

Investment bank Jefferies expects Cheung Kong to achieve a strong launch, owing to affordable pricing and demand from investors seeking rental income.