Hong Kong developers to launch more flats to cash in on rising demand
As many as 7,900 apartment units in 20 projects are due to go on the market in the second quarter. Developers will speed up the process of launching them to cash in on demand
Hong Kong’s developers will accelerate the launches of new apartments, taking their cues from the stronger-than-expected housing demand in the past two weeks.
As many as 7,900 apartment units in 20 new projects are scheduled for launch in the second quarter, according to data gathered by the South China Morning Post. Developers had been encouraged by the demand over the past two weeks to raise prices, agents said.
Two major projects by Cheung Kong Property Holdings and Sun Hung Kai Properties, two of the city’s bellwether developers, will offer clues of the market’s direction.
Cheung Kong has a 378-unit Harbour Glory complex at Oil Street in North Point, which is setting a record price for the Island East district, while SHKP will launch its 355-unit Victoria Harbour at 133 Java Road.
“Buying sentiment is really hot as most projects have generated unexpectedly strong sales outcomes,” said Alfred Lau, an analyst at Bocom International. “It will encourage more prospective buyers to enter the market as they are concerned about missing out on the buying opportunities.”
More than half of the units will be in the New Territories, led by CK Property’s 970-unit Ocean Pride and Chinachem Group’s 953-unit Parc City, which is close to the Tsuen Wan West MTR Station on the West Rail.
Long queues during sales launches over the past two weeks had given Hong Kong’s property developers the confidence to raise prices as more local and mainland Chinese buyers shrugged off any concerns of rising mortgage rates to put their money in new apartments, agents said.
At the Cullinan West complex atop the Nam Cheong MTR Station in Kowloon, SHKP raised the price of its second batch of apartments by 39 per cent to HK$26,382 per square foot two weeks after selling out the first batch.
To be sure, the second batch comprised units on higher floors that commanded a better view of Victoria Harbour and were not directly comparable with those in the first batch, the developer’s deputy managing director Victor Lui said.
Even prices in Kai Tak, the site of the city’s former airport, have surged as much as 77 per cent since August last year. Developers had been paying land parcels at record prices, which in turn compelled them to raise the prices of their apartments, leading to a general spiralling up of prices, JLL’s regional director of capital markets Henry Mok said.
At the Vibe Centro apartment complex in Kai Tak, Poly Property Group raised the asking price of its latest batch of 108 units to HK$25,646 per square foot, 28 per cent higher than the launch price two weekends earlier. Already, 57 of the 108 units had been sold with discounts as of Sunday, according to Poly’s head of sales and marketing Virginia Kao, who said the price of the remaining unsold units could rise a further 10 per cent.
“Whether the upward trend of prices can be sustained and whether developers can generate a reasonable profit from their recent land purchases will largely depend on the market conditions at the time of sale,” Mok said. “Changes in the financing environment, the land sale system and stamp duty rates could weaken their case.”