Hong Kong’s luxury residential property market will face a real test this weekend when Kerry Properties starts selling its Mantin Heights in Ho Man Tin in the face of a rising number of defaults and price cuts by rival developments in the area. Ho Man Tin is in the grip of a price war among developers, who have flooded the area with more than 2,000 new units. Wheelock Properties on Friday fired the first salvo by slashing prices by another 8 per cent for its 561-unit One Homantin to undercut Kerry Properties’ 1,429-unit Mantin Heights scheduled to come on the market on Saturday. Property developers’ margins set to fall to levels not seen in 13 years Louis Chan Wing-kit, Centaline Property Agency’s managing director, residential, blamed the continuous increase in supply and a looming economic slowdown for the tepid buyer response. “As potential buyers are likely to defer purchases in anticipation of more price cuts by developers, homebuying interest will be further dampened,” said Chan. Wheelock’s steep discount has already scared off buyers of One Homantin. Instead of speeding up sales, just 12 of the second batch of 74 flats put on the market were sold by Monday. Along with the 33 flats sold in the first batch, Wheelock has sold 45 units since the launch a week ago. Buyers are also increasingly walking away from deals. A buyer has just cancelled the purchase of a 1,708 square feet unit priced at HK$69.5 million at Ultima phase two. The developer, SHKP, can forfeit the initial deposit of about HK$3.5 million. There have been at least four instances of cancellations at One Homantin as buyers refused to complete the transaction by Tuesday, as stipulated, according to the Sales of First Hand Residential Properties Electronic Platform set up to enhance the transparency of new flat sales. Flat value plunges HK$1 million in five days as desperate Hong Kong developer cuts prices These buyers, the website shows, committed to HK$9.4 million to HK$10.4 million for the apartments at One Homantin when they were first launched on March 25. The developer will forfeit the 5 per cent initial deposit of HK$1.97 million, as per rules. New World Development also recorded two cases of defaults at its Parkhill in Yuen Long while three such cases were reported at The Spectra in Yuen Long, jointly developed by K Wah International and Sino Land. Kerry Properties has decided to brave this unfavourable environment to proceed with the sales of the first batch of 108 units at its Mantin Heights development on Saturday, a day before SHKP offers 45 units at Ultima phase two in the same area. Nicole Wong, regional head of property research at CLSA, said developers in the area with plenty of supply will compete directly to lock up sales as fast as possible in view of the declining property prices. “Otherwise, developers will miss a selling opportunity and may be forced to sell at lower prices later,” she said. Separately, Urban Renewal Authority (URA) on Wednesday said it received 30 expressions of interest for a 115-unit development in Tai Kok Tsui.