Luxury property projects draw mixed response form buyers

It was tale of different worlds in property sales on holiday Good Friday, as two luxury projects in Ho Man Tin drew a different responses from buyers, with one hot and the other cool, indicating that big-ticket purchasers are becoming selective in their home purchases.

Buyers snapped up nearly all of the first batch of 35 units at Sun Hung Kai Properties’ Ultima phase two, while a similar high-end project by Wheelock Properties, One Homantin, about a 10 minute walking distance away, managed to attract sales for 30 of the 148 units on offer, according to sources.

The two projects have registered 900 prospective buyers ahead of the official sale.

“Investment sentiment has weakened as increasingly people expect home prices to fall further,” said Philip Capital Management fund manager Li Kwok-suen.

SHKP’s sales office has accumulated a queue of more than 300 prospective buyers and agents when it started the sale for 35 units from noon.

“The projects recorded huge interest from prospective buyers, but the result tells the truth,” he said.

He said luxury homes would take longer to sell as they involve large lump sum payments.

“Ultima generated better interest given its attractive financing scheme and that the apartments will be delivered in about six months,” said Sammy Po Siu-ming, chief executive at Midland Realty’s residential department.

He said flats at One Homantin, due to be delivered in May 2018, may not meet the need of upgraders who want to move into new flats right away.

SHKP arranged the sale of Ultima units over the holiday long weekend, with 35 units being offered on Friday and the remaining 15 flats to be launched on Saturday.

Developers have recorded slow sales recently amid a supply surge and cooling buying demand.

Industry experts said SHKP’s sale of 34 units just accounted for about 13 per cent of the 271-unit Ultima phase two development.

“We have to see the response of the remaining 237 units,” said one analyst. Together with Kerry Properties’ 1,429-unit Mantin Heights adjacent to One Homantin, there will be a combined supply of more than 2,200 units in Ho Man Tin.

On Friday, most of buyers at Ultima were for units priced between HK$20 to HK$30 million, with one family forking out nearly HK$140 million to acquire four flats, according to market sources.

Under the financing scheme, buyers of Ultima phase two will enjoy a 600-day loan of up to 82 per cent of the flat value, in a bid to encourage buyers to trade up to larger flats.

Without the financing scheme prospective buyers are required to put down 50 per cent of the initial down payment for flats worth more than HK$10 million, according to existing mortgage rules.

Buyers at Ultima face an initial down payment as low as HK$3.6 million with the help of the developer’s bridging loan.

Discounted prices for units at Ultima phase two development were HK$16,316 and HK$48,834 per square foot. With the units size range from 1,221 sq ft to 2,019 sq ft, the lump sum amount went to HK$20.5 million and HK$98.59 million.

Wheelock will provide buyers a 30-year second mortgage of up to 25 per cent of flat’s value. Buyers are also allowed to defer the principal payment and waiver of interest for the first two years from the date of the loan advancement. But the first and second mortgage loans together cannot exceed 80 per cent of the flat value

Prices for One Homantin begin at HK$16,504 and HK$24,210 per square foot after factoring in a 17.5 per cent discount.