Sun Hung Kai’s low-price tactic for new flats at Cullinan West II appears to pay off
Buyers snapped 350 of the 364 units on sale, with one taking six for HK$156 million
Efforts by Hong Kong’s biggest developer to lure back investors to a property market showing signs of weakening by offering lower prices and mortgage incentives for a batch of new flats appear to have paid off.
Sun Hung Kai Properties (SHKP) sold about 350, or 96 per cent, of the tranche of 364 units released at its Cullinan West II project at Nam Cheong MTR station in Kowloon on Sunday, according to market sources.
The sale was the largest weekend offer of new homes since brokerage CLSA joined Citibank and UBS in predicting a sharp downturn in Hong Kong’s famously unaffordable housing market. CLSA warned home prices would drop 15 per cent over the next 12 months as the market faced its worst combination of headwinds in 15 years – rising interest rates, a slowing economy and a depreciating Chinese currency.
“The good turnout means the market still has liquidity. Once developers are willing to lower their selling prices by 5 or 10 per cent, it will encourage investors and buyers to quicken their purchase decisions,” said Colliers International’s deputy managing director Vincent Cheung Kiu-cho.
SHKP offered the flats at an average price of HK$23,893 per square foot after discounts of up to 20 per cent, about 10 per cent lower than a previous batch that went on sale in December.
The developer was also offering first-time mortgages of up to 80 per cent of the flat’s value, much higher than the standard mortgage ceiling of 60 per cent of a property valued below HK$10 million (US$1.3 million), and 50 per cent for those above HK$10 million.