Tseung Kwan O new flat price drops to three-year low of HK$3.51 million
Goldman Sachs predicts 20 per cent drop in Hong Kong home prices from now to 2018
Developers continue to undercut second-hand home prices as sales volumes claw back from near record lows, with Wheelock Properties launching its new project in Tseung Kwan O at prices starting at HK$3.51 million, the lowest for new flats in the area in three years.
The launch came after brokerage house Goldman Sachs forecast home prices would drop 20 per cent from now to 2018, driven chiefly a potential 150 to 200 basis point increase in interest rates.
On Thursday, Wheelock Properties released the first batch of 161 flats at Savannah at discounts of 15.5 per cent to 19.5 per cent.
We have not seen new flats selling below HK$4 million for some years in Tseung Kwan O
With discounts of up to 19.5 per cent, the cheapest flat, a 310 sq ft unit, will cost HK$3.55 million. But buyers who are previous purchasers of Wheelock flats or who buy more than one unit will receive an additional 1 per cent discount, taking the price for the unit down to HK$3.51 million.
“We have not seen new flats selling below HK$4 million for some years in Tseung Kwan O,” said Sammy Po, chief executive of Midland Realty’s residential department.
The first batch of Savannah units, ranging from 288 sq ft to 748 sq ft, have been priced at between HK$4.21 million and HK$11.87 million. Factoring in a maximum discount of 19.5 per cent, prices will range from HK$3.51 million to HK$9.56 million, or HK$10,310 to HK$12,971 a square foot.
Industry experts said the price range was the lowest since the government introduced tougher rules to regulate developers’ sales of new flats in April 2013.
Po said the average discounted price at Savannah was 11,680 a square foot, 5 per cent to 10 per cent lower than the going rate for units in other recently launched new projects in nearby areas.