One Kai Tak Phase Two sells out on the first day in new sign of healthy market

Prices at 22 per cent above initial launch level fail to deter buyers for the Hong Kong residents-only development

PUBLISHED : Saturday, 14 January, 2017, 10:32pm
UPDATED : Saturday, 14 January, 2017, 11:29pm

All 188 flats on offer at the One Kai Tak Phase Two project were sold on the first day on Saturday, in a ­further sign that demand in the ­local market remains strong.

The project, on the site of the city’s former airport, is being developed by China Overseas Land and Investment, one of the growing number of mainland developers stepping up activity in the Hong Kong market to escape slow markets at home. The units are for sale to Hong Kong residents only.

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“One Kai Tak is popular among buyers as there are offices and commercial areas as well as a railway station,” said Sammy Po, chief executive of Midland Realty’s residential department.

The strong sales came after home prices in the city rose to a record in November, even as the government unveiled a higher stamp duty to curb investment demand.

The first 125 units of One Kai Tak Phase Two were on offer at between HK$17,414 and HK$26,013 per sq ft. After taking into account a 14.5 per cent discount, the price came down to HK$14,889 to HK$22,240 per sq ft. The average discounted price was HK$17,500 per sq ft, about 22 per cent above the previous launch price in August of HK$14,400 per sq ft. The average discounted price per square foot for the ­remaining 63 flats was HK$17,879. The higher price came after another mainland ­developer, conglomerate HNA Group, bought a nearby Kai Tak site for a record HK$13,600 per sq ft in ­November last year.

“The price has factored in the recent land sale result in the area and the latest market conditions,” said Tony Yau, a director and general manager at China Overseas Property, a subsidiary of China Overseas Holdings, which is China Overseas Land’s parent.

The company won the One Kai Tak project in June 2013 for a total of HK$4.54 billion, under a government initiative known as “Hong Kong Property for Hong Kong People”, which was aimed at preventing overseas buyers from bidding up prices. Units at One Kai Tak Phase Two are exclusively for buyers who hold Hong Kong permanent resident cards.

Midland’s Po said 80 per cent of buyers through his company were buying for themselves, and 20 per cent for investment. About half the buyers for their own use were first-time house purchasers. Additional reporting by Sandy Li