Spectra in Yuen Long launches amid home sales plunge to 20-year low
K Wah International and Sino Land’s joint venture Spectra development in Yuen Long is being pitched at lower prices than a Cheung Kong Property project down the road to drive buying interest amid a plunge in home sales last month to a 20-year low.
Next to West Rail’s Long Ping Station, the Spectra’s location should be the best of the projects on sale in Yuen Long.
“The project will attract interest among upgraders in the area,” said Sammy Po, the chief executive of Midland Realty.
He said 80 per cent of interested buyers were from the New Territories and a small percentage from Kowloon.
On Friday, K Wah announced prices of HK$11,424 to HK$14,325 per square foot for the first batch of 208 units. Factoring in discounts of as much as 12 per cent, the price of a flat will drop to HK$10,053 to HK$12,606 per square foot, or HK$3.38 million to HK$11.11 million.
The cheapest flat is a first-floor, 337 sq ft unit, in Block Two on offer for HK$3.38 million, or HK$10,053 per square foot.
The price is about 3 per cent lower than Cheung Kong’s Yuccie Square, he said. In November, Cheung Kong offered the first batch of flats at Yucci Square at discounted prices of HK$11,900 per square foot.
On Monday, K Wah released the second batch of 188 units at 1.7 per cent higher than the first batch, raising the total number of units available for sale to 396.
The developer, through its financial institutions, will provide home loans of up to 80 per cent of a flat’s value for Spectra buyers.
The 25-year loan has a fixed rate of 3 per cent for the first three years and from the fourth year switches to the prime rate, now standing at 5 per cent.
In response to K Wah’s strategy, Cheung Kong offered a cash rebate of up to HK$400,000 to buyers of three-bedroom flats at Yuccie Square.
“It is effectively a price cut,” said an industry expert.
At Spectra, due to be completed in early 2018, more than 1,000 potential buyers have signed up to reserve their right to buy.
In February, there were 1,809 residential transactions as mass-market home prices fell 12.4 per cent from their peak in last August, said property consultants DTZ/Cushman & Wakefield.
Alva To, senior managing director of Hong Kong at the consultant, said the fall in home sales below the benchmark 2,000 level was a sign of buyers’ worries about the continuous decline in market trend.
“Given the substantial drop in general pricing and the strong demand from end-users, there is already slight improvement in sales volume. However, whether home prices can begin to stabilise is questionable, as the outlook for the regional economy is still clouded,” To said.