Developers reap positive sales over the weekend despite repeated warnings of price falls

Buyers respond positively to flats in Tuen Mun and Tseung Kwan O areas of Hong Kong, snapping up 524 of a combined 641 flats launched for sale

PUBLISHED : Tuesday, 17 November, 2015, 11:00pm
UPDATED : Tuesday, 17 November, 2015, 11:00pm

Despite repeated warnings by investment bank analysts that Hong Kong home prices are heading for a correction, developers are still managing to lure enough eager buyers for their properties.

This was evident from strong sales at residential projects in Tseung Kwan O and Tuen Mun over the weekend.

Wheelock and Co’s wholly owned Wheelock Properties launched the sale of the Capri development in Tseung Kwan O, selling 301 of the 308 units on offer in the first batch.

At the same time, Kerry Properties also launched the sale of Bloomsway in Tuen Mun and sold 223 units of 333 units in the first batch.

“The positive sales results of two new projects over the weekend suggest that pent up demand supported primary launches with reasonable pricing,” said Patrick Wong, a property analyst at BNP Paribas.

The average selling price – after discount – of the first tier of 88 units at Capri development is HK$12,080 per square foot, That is about 10 per cent below comparable second-hand properties in the district, according to BNP Paribas.

However, the real test will come when developers face the large amount of new supply launching in the coming weeks.

Wong expects the developers to avoid setting aggressive prices for their launches.

Yuen Long will be the arena for upcoming launches. They include Cheung Kong Property’s Yuccie Square and SHKP’s Park Vista.

Sales in the secondary market remain quiet, where three units were sold at the 10 largest residential estates tracked by Centaline over the weekend, against seven units the previous weekend.

The latest Centa-City Leading Index rose 0.27 per cent week-on-week to 142.14. The index is up 7.3 per cent year to date.

Kerry Properties is controlled by the Kerry Group, the controlling shareholder of the SCMP Group, which publishes the South China Morning Post.