SHKP demands HK$7m deposit from buyers – just to book a viewing at its North Point flats

Hong Kong’s property market has sparked dramatically into life again this week, with developers and individual owners moving fast to take full advantage, as prices continue rising to stratospheric levels in some cases.

Just a day after a waterfront site in the former industrial area Cheung Sha Wan was sold to a consortium of five companies from Hong Kong and the mainland for a massive HK$17.28 billion (US$2.21 billion) on Wednesday – making it the city’s most expensive residential plot ever – potential buyers of a luxury project in North Point are now being asked to stump up a whopping HK$7 million deposit (US$896,000) just to view units at the site.

On Thursday, Sun Hung Kai Properties (SHKP) kicked off the marketing of the project in question “Victoria Harbour”, and “Cullinan West II”, which is being built above Nam Cheong Station in Kowloon’s Sham Shui Po area.

Cheung Sha Wan residential land could fetch record price

SHKP released just 10 units at Victoria Harbour for tender (highest bidders wins), while the launch price at Cullinan West II proved to be 11 per cent higher than its first phase, launched in August.

At Victoria Harbour, interested parties are required to submit a HK$7 million cashier’s order, just to book a slot in the advance appointments book. They will be refunded if they decide not to buy.

Hong Kong’s competitiveness loses lustre with record home costs

Victor Lui Ting, deputy managing director at SHKP, insisted the massive cash outlay, just to set foot in a unit, was an “appropriate practice”, as flats at Victoria Harbour are considered rare products.

Sammy Po, chief executive at Midland Realty’s residential department, added: “SHKP certainly wants to make sure any viewers are serious buyers.”

As the flats will be sold to the highest bidders, the developer has not released any projected price list, but Po said Victoria Harbour is likely to set a new cost benchmark for the district.

Meanwhile, SHKP also released the first batch of 238 units at Cullinan West II – close to the record-breaking Cheung Sha Wan site – at an average discounted price of HK$21,152 per square foot.

Hong Kong’s property cartel is pushing inequality to the brink

That’s 11.33 per cent higher than units in phase one, released three months ago for HK$18,998 per sq ft.

The cheapest unit at Cullinan West II is a 272 sq ft studio flat on offer for HK$5.68 million, while a one-bedroom, 349 sq ft flat will cost HK$6.66 million. SHKP’s Lui described the prices for the first batch of Cullinan West II as “attractive”.

The record-breaking HK$17.28 billion Cheung Sha Wan plot is planned to deliver 986,789 square feet of gross floor area, which translates into HK$17,500 per square foot, and a potential 1,200 flats.

But Sammy Po said any units eventually built on the site would have to achieve HK$30,000 per sq ft for its developers to generate any reasonable profit.

SHKP to build almost 5,000 homes on Sai Kung farmland

He described the land sale, rather aptly, as a case of “the flour being more expensive than the eventual bread”, adding “it will certainly encourage home seekers to make quick decisions, fearing further increases in prices”.

He said the Cheung Sha Wan sale has already sparked further crazy price rises at other nearby developments.

“Some owners in the area raised prices by 5 to 10 per cent immediately after the land sale,” he said.

In one case, the owner of a 735 sq ft unit at Banyan Garden, in Cheung Sha Wan, raised the asking price for his flat for sale by HK$1 million to HK$15.88 million, or HK$21,600 per sq ft, right after the land sale on Wednesday.

“The asking prices per square foot are now at their highest ever level in the area,” added another agent.