Hong Kong property

Thousands defy thunderstorm to snap up Nan Fung’s LP6 flats in Lohas Park, lured by developer’s discounts

PUBLISHED : Saturday, 08 September, 2018, 7:02pm
UPDATED : Monday, 10 September, 2018, 11:21am

Thousands of Hong Kong homebuyers defied a thunderstorm to vie for apartments in the city’s biggest property sale in six months, attracted by developers’ discounts as they slash prices ahead of additional supplies coming on stream.

Nan Fung Development sold 460 units of its LP6 project in Lohas Park, or 95 per cent of the 487 units on offer, as of 8:15pm on Saturday. A total of 8,145 people registered for the sale, or 17 buyers vying for every unit, lured by the average discounts of 19.5 per cent off the prevailing prices, agents said.

“A handful of buyers wanted to buy four flats for more than HK$28 million each,” said Louis Chan, Asia-Pacific vice-chairman and chief executive of the residential division at Centaline Property Agency. “Investors can lease one-bedroom flats at Lohas Park for more than HK$9,000 a month, at a return of about 3 per cent.”

A customer from mainland China put down HK$35 million (US$4.5 million) for three of the three-bedroom units and a single-bedroom studio for investment, paying HK$10.5 million in stamp duty, agents said.

The overwhelming response came despite a likely rise in prime rate among local banks next month and forecasts by at least four banks that home prices would drop next year.

“Purchasing power is still strong in the market. Buyers may also be attracted by the location and discounts,” said Billy Mak, associate professor at the department of finance at Baptist University.

Lohas Park is expected to become Hong Kong’s largest residential community by 2025, with 58,000 residents in 21,500 units.

Despite the strong sales, headwinds such as rising interest rates next month and intensified US-China trade war might already have reduced the buying sentiment in the market, Mak said.

That said, buyers of the development are not convinced that home prices would drop soon.

An Indian expatriate couple in their late forties wanted to buy a two-bedroom flat of HK$7 to HK$7.5 million.

“We have been in Hong Kong for more than 20 years. Home price in Hong Kong has kept rising and we have waited a long time so we decide to buy now,” the husband Anto said.

They did not worry about any potential change in the market.

“We would buy a flat as long as we can afford the mortgage repayment,” said Anto. “If we cannot buy a flat within our budget this time, we need to wait for the next round for one.”

The Chans in their fifties said their married son, 32, would like to buy a one-bedroom flat of about HK$4 million and arrived at the sales office at around 2pm.

“We like Lohas Park. Prices [there] are reasonable,” Mrs Chan said. “But we worried he could not buy one. But now we are happy he can. We are so lucky.”

The Chans said they also submitted registrations of interest for their son to increase his chances of buying a flat, which means the family submitted three registrations of interest in total.

The older Mr Chan got a number that ranked high in the lottery that decided the sequence of buying flats.

“This development allowed us to transfer the better right of buying within the family,” said Chan. “We could not do this for his last attempt to get a flat at [Sun Hung Kai Properties’] Park Yoho Milano project.”

When asked if they worried about the recently downbeat stock market and rising interest rate would drag the local home market, she remained optimistic and said “it is of no use to worry so much”.

“We have observed the home market for a long time but prices have not dropped,” said Mrs Chan. “Even used flats are expensive.”

Centaline’s Chan said whether subsequent launches of the development can also receive such overwhelming response will be a test of the market. The remaining 1,905 flats at the development will be offered in the coming weeks.

As the first development hit by the requirement to sell at least 20 per cent of the development at each launch, Nan Fung has to sell more than 479 flats each time.

With additional reporting by Sandy Li and Martin Choi