Hong Kong property

Demand cools for Ocean Pride apartments, even as Cheung Kong sells 95 per cent of available units

PUBLISHED : Saturday, 08 July, 2017, 7:17pm
UPDATED : Saturday, 08 July, 2017, 7:17pm

Cheung Kong Property Holdings, one of Hong Kong’s largest real estate developers, has received 50 per cent fewer registrations for the latest phase of its Ocean Pride apartments in Tsuen Wan, in another sign that buyers are staying by the sidelines while the world’s hottest residential market appears to be losing heat.

Up to 6,500 people registered their interest to buy 412 units in the complex, ranging from 497 square feet to 1,163 sq ft, or an average of 16 buyers for every available unit. That’s 50 per cent fewer than the previous phase of Ocean Pride offered for sale in May, when 14,500 buyers registered for 496 units, or an average of 29 buyers for every unit.

“Home prices have risen for 13 consecutive months, and so more buyers are now adopting a wait-and-see attitude,” said Midland Realty’s residential division chief executive Sammy Po.

Still, Cheung Kong sold 95 per cent of its offerings, or 390 units, as of 4:30 pm on Saturday, generating an estimated HK$5 billion (US$640 million) in sales receipts on the first day the apartments were put on the market, agents said. One buyer booked five of the four-bedroom apartments for a total HK$100 million, said Cheung Kong Property’s executive director Justin Chiu Kwok-hung.

Most of the apartments on sale on Saturday came with a view of the sea, and therefore commanded a 7 per cent higher price than the previous phase, which kept less endowed buyers on the sidelines, Po said. Average price was HK$17,234 per sq ft, after a 22 per cent discount.

To bolster sales, Cheung Kong partnered with Centaline Mortgage Broker Ltd., the mortgage referral service of Centaline Group, to offer customers a fixed mortgage rate of 1.68 per cent for the first year, the lowest rate in Hong Kong.

The remaining amount will be charged 1.28 percentage points above Hong Kong’s interbank offer rates, or Hibor, and will be capped at 3.1 per cent below the prime rate of 5.25 per cent. Based on the Hibor, which was at 0.47 per cent on Friday, buyers will be charged a mortgage rate of 1.75 per cent from the second year.

The successful sale makes Ocean Pride the project that’s sold the most number of units so far this year in Hong Kong, as buyers digest a slew of market-cooling duties and taxes by the government, while mortgage rates are poised to rise in line with US Federal Reserve monetary policies.