Hong Kong’s property mania cools as 3,800 buyers turn out for third batch of units at Ocean Pride
Enthusiasm among prospective property buyers dampens after CK Property hikes prices by up to 19 pc in two weeks for third batch of 122 units
The sales office of Cheung Kong Property Holding ’s new residential project located in Tsuen Wan appeared less crowded on Tuesday than during previous property launches, a day after a top financial official issued his strongest warning yet about escalating risks in the property market.
Queues of prospective buyers started to form at the Fortune Metropolis mall in Hung Hom from 6pm, with an estimated 3,800 in line for the offer. That was noticeably fewer than the 14,000 who queued during the first launch two weeks ago.
More than 100 out of the 122 units in the third batch of Ocean Pride were sold as of 9pm. Prices for the units were increased as much as 19 per cent from two weeks earlier, fetching up to HK$25,000 per square foot (US$3,207.7) after discounts. CK Property has kept 30 units back for the final release.
The sale comes after Financial Secretary Paul Chan Mo-po warned on Monday that “the risk in the property market is very high; sentiment in the property market is very exuberant”.
He said home prices in Hong Kong, already the least affordable city in the world, were now nearly 90 per cent above their peak in 1997.
He also gave assurances that the city’s financial and banking systems were stronger than in 1998 when the property bubble burst, and during the aftermath of the global financial crisis in 2008.
“About 70 per cent of our clients are investors and the remaining 30 per cent are end users,” said Louis Chan Wing-kit, vice chairman of Centaline Property Agency’s Asia Pacific residential department.
Ahead of Tuesday’s launch, the developer had sold 842 units, generating sales revenue of HK$8.9 billion.
Justin Chiu, executive director of CK Property, said the company has achieved sales revenue of more than HK$20 billion in the first five months of this year.
CK Property’s revenue from the project will increase to HK$10.2 billion if the remaining 122 units were sold at list prices on Tuesday. Ocean Pride, due to be completed in September 2018 is comprised of 970 units.
Prices for the 122 units in the third batch of Cheung Kong’s Ocean Pride flats next to the Tsuen Wan West railway station would be priced between HK$12,700 per sq ft and HK$25,000 per sq ft after a 20 per cent discount.
Six higher-floor units, in sizes of 770 sq ft to 1,149 sq ft, with views of Ting Kau Bridge, are being offered for HK$19.25 million and HK$28.7 million.
The home buying frenzy is expected to boost new apartment sales to a record HK$143 billion in the first half this year, driven by developers’ flexible financing schemes and accelerated project launches, according to Ricacrop Properties
Together with sales of apartments in the secondary market, total transaction value could top HK$300 billion in the first half.
“The first half year total sales value in the primary and secondary market will be the third highest since 1997,” said Derek Chan, head of research at Ricacorp Properties.
The HK$380 billion in housing transactions recorded in the first half of 1997 remains a Hong Kong record for any half-year period, followed by HK$310 billion in the second half of 2010, he said.
The number of transactions in the primary and secondary market could reach more than 33,000 for the first six months this year, Chan said.