Homebuyers snap up apartments with over 25 per cent discounts in southwest Kowloon

Home buyers yesterday snapped up 36 seaview flats put up for sale by Hang Lung Properties for the first time at its 12-year-old Long Beach development in southwest Kowloon.

Rather than reflecting confidence in the property market, which is facing a significant downturn, they were attracted by discounts of up to 26.2 per cent off listed prices on units with sea views.

Hang Lung had been holding its inventory all these years at the estate in Tai Kok Tsui, hoping for a better market, but falling prices over the past year forced it to offer discounts and stamp duty rebates to lure buyers.

The developer said it had received 2,580 purchase applications for this batch of two- and three-bedroom flats ranging in size from 562 sq ft to 863 sq ft.

The average sale price was HK$14,000 per sq ft, after Hang Lung offered a 60 per cent buyer’s stamp duty rebate – the equivalent of a 9 per cent discount on the listed price – and a cash rebate of up to 1.2 per cent for those who bought more than one unit, among other concessions.

“The prices are down nearly 20 per cent compared with last year, so buyers find the prices reasonable,” said Sammy Po Siu-ming, chief executive of Midland Realty’s residental department. Hang Lung built the seaside complex, its largest residential project in Hong Kong, in 2005. It has 1,829 units in total, but only 400 were put up for sale from 2013 until now. More than 600 units are still available – the company has said they will be sold when market conditions are favourable.

“I think the developer will present some more units this year, but not all, given their track record,” Po said.

Hong Kong’s new home supply is expected to peak in two years’ time as projects launched in recent years are completed, raising the threat of a further downturn for developers.

Home prices are expected to fall a further 19 per cent up to the second quarter of 2017 according to Nomura, or even collapse by 60 per cent in the event of a 30 per cent one-time devaluation of the yuan or rate rises of 400 basis points by the US Federal Reserve over a two-year period.

Analysts said developers were resorting to offering more favourable terms and prices to compete for buyers before the market cooled further.

Hang Lung in January cut its final dividend for the first time in 16 years after core earnings for 2015 slumped 56 per cent, the biggest fall since 2011, to HK$4.38 billion. It sold 63 flats and some car-parking spaces during the year, which fetched HK$1.19 billion, down 88 per cent from a year earlier.

Separately, Sino Group yesterday sold 143 car-parking spaces with an average price of HK$2.47 million for residents of its Olympic station development, The Hermitage.