Developers of Hong Kong luxury homes face test as market sentiment weakens
Launches of luxury projects face headwinds as confidence in economy and housing market dips
As sentiment in the housing market and the economic outlook of the city weakens, developers of luxury homes in Hong Kong will face a real test when they launch their new properties.
At least four residential projects in Mid-Levels West are coming on stream, ahead of the potential rate rise by the US Federal Reserve at the end of this year, and Swire Properties today will open the tender of 24 houses at its 28-house development in Cheung Sha, on Lantau island.
"It all depends on the marketing strategy and pricing," said Thomas Lam, head of valuation and consultancy at Knight Frank, adding that the total new supply of luxury homes on Hong Kong Island remains limited and there is demand in the market segment.
The projects in Mid-Levels West include the 27-unit Cluny Park at 53 Conduit Road developed by Sino Land, a 35-unit luxury development at 55 Conduit Road owned by Chinese Estates (Holdings) and New World Development, and The Morgan at 31 Conduit Road owned by the Hong Kong real estate private equity fund, Phoenix Property Investors.
It also includes Henderson Land Development's 90-unit development at 23-25 Robinson Road. All these projects, mostly with three to four bedrooms, target large-sized affluent families.
The first one to take the test is Cluny Park. Developer Sino Land intends to offer some units through tender early next month. The developer bought the site in 2004 from gaming tycoon Fu Lo-yung's family and turned it into a 27-unit block, with typical three to four-bedroom apartments with 1,223 to 2,369 of saleable square feet.
Sino Land does not release selling prices but agents estimate the large-sized units are worth more than HK$100 million each.