Cheung Kong raises Ocean Pride prices by 10 per cent in a week in market’s bullish outlook

Cheung Kong Property Holdings will raise the price of its third batch of Ocean Pride apartments by 10 per cent, a week after selling out all 842 of the project’s earlier units, a marketing strategy that underscores the expectation that Hong Kong’s record home prices won’t succumb to gravity.

Prices for the 122 units in the third batch of Cheung Kong’s Ocean Pride apartments next to the Tsuen Wan West subway station will be priced between HK$12,700 per square foot and HK$22,000 per sq ft after a 20 per cent discount, the developer said.

“The price is about 2 to 10 per cent higher than the previous launches,” said William Kwok, a director of the developer’s wholly-owned subsidiary Cheung Kong Real Estate.

Cheung Kong won’t be alone in raising prices. Residential property prices in Hong Kong, already the world’s most expensive major urban centre, will increase by another 5 to 10 per cent in 2017, according to a forecast by Knight Frank, despite best efforts by the city’s government and monetary authority to cap prices.

Hong Kong’s government raised the stamp duty on residential property purchases by non-local buyers to 15 per cent, while the monetary authority on May 19 ordered banks to cut the amount of allowable loans on homes by 10 percentage points, in moves aimed at deflating a property bubble that has already surpassed the city’s previous peak in 2015.

Still, prices are likely to rise by 10 per cent among luxury residences exceeding HK$12 million (US$1.54 million), where one in every five buyers is likely to hail from mainland China, Knight Frank said.

“It is the highest proportion since 2013 after the buyer stamp duty was introduced,” said Thomas Lam, a senior director and head of valuation and consultancy at Knight Frank.

While mainland Chinese buyers are snapping up apartments and luxury homes, mainland developers -- who’ve spent HK$40 billion buying land this year -- are also piling on to add to Hong Kong’s housing stock, estimated to account for between 15 per cent to 20 per cent over the next three to four years.

Grade-A office rents in Central are likely to rise by 5 to 10 per cent this year, while those in Kowloon are forecast to drop 2 to 5 per cent, Knight Frank said. Rents for prime street shops are forecast to decline 0.5 per cent, the property consultancy said.

Midland Realty estimates that total monthly property transactions for May, including apartments, shops, industrial units, car parking spaces, will decline 16.2 per cent on month to 7,527 transactions.