Upbeat luxury market sentiment spurs launch of more projects

Developers take cue from the mood in the luxury residential segment and return to the market

PUBLISHED : Wednesday, 20 August, 2014, 5:21am
UPDATED : Wednesday, 20 August, 2014, 5:21am

Positive sentiment in the luxury residential market has spurred more developers to launch projects, while owners of luxury homes in the secondary market have become reluctant to cut asking prices.

A number of developers released brochures last week as they prepared to launch projects. Swire Properties released its 127-unit Arezzo at 33 Seymour Road in Mid-Levels, Henderson Land Development released sales brochures for its 110-unit High One Grand in Cheung Sha Wan, and Hang Lung Properties relaunched the HarbourSide in West Kowloon, where an estimated 276 units remain unsold.

"Sentiment has improved after some major transactions," Landscope Christie's International Real Estate chief executive Koh Keng-shing said.

Those transactions include the sale of a house at 10 Bowen Road and a house at Sun Hung Kai Properties' Twelve Peaks at 12 Mount Kellett Road.

SHKP launched sales at Twelve Peaks on Friday and sold House No12 for HK$413 million, or HK$109,424 per square foot, the third-highest unit price in Hong Kong.

The project has 12 houses with an average selling price of HK$108,665 per square foot. House No1 is being offered for HK$819.1 million, or HK$175,735 per square foot. If it gets this price, it will be the world's most expensive home on a square foot basis. SHKP bought the 42,658 sq ft site in 2006 for a record HK$1.8 billion, or HK$42,196 per square foot.

Taking advantage of the improved sentiment, Kerry Properties will launch 3 Ede Road in Kowloon Tong today. The first batch includes 30 units sized between 1,409 and 1,750 sq ft, with an average selling price of HK$39,165 per square foot.

The average selling price after the maximum discount of 7.25 per cent is HK$36,228 per square foot. That is 13 per cent above the average selling price of recent secondary transactions at One Mayfair in the same district, according to BNP Paribas. The minimum price tag of a 1,485 sq ft unit is HK$53.12 million.

Sino Land will relaunch units at Mayfair By The Sea in Tai Po, today.

Patrick Chow Moon-kit, the research head of Ricacorp Properties, said developers would gradually sell their flats as sentiment improved, adding that sentiment in the secondary market had also picked up.

Koh said: "In the second quarter, owners were happy to cut asking prices by 5 to 10 per cent in the hope of clinching the deal. But now they are reluctant to cut prices."

According to Savills, property prices on the Peak fell 1.7 per cent in the second quarter and those in Happy Valley and Jardine's Lookout dropped 2.8 per cent. Prices in Mid-Levels, Pokfulam and the South Side rose slightly, by between 0.6 per cent and 1.7 per cent.