Hong Kong reports the worst sales weekend in years as private launches fail to keep up with government’s discounted housing

Hong Kong’s government announced a scheme on Friday that would offer flats in Cheung Sha Wan at 42 per cent of market prices starting next month

That has put the private launches in Yuen Long and Tsuen Wan at a distinct price disadvantage, as they are all aimed at the same target group of first-home buyers

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A drone’s view of Reach Summit under construction in Yuen Long, as of 16 November 2018. SCMP / Winson Wong

Published: 8:15pm, 17 Nov 2018Updated: 3:00pm, 19 Nov 2018

Hong Kong’s residential property market reported its worst sales weekend in years, as the wind was taken out of the sails of two private project launches by a government offer of discounted housing for first-home buyers.

The Reach Summit project in Yuen Long, jointly built by Henderson Land Development and New World Development, sold six flats as of 6:30pm, a mere 6 per cent of the 102 units on offer, sales agents said. In Tsuen Wan, MCC Real Estate Group sold five of the 50 units at its L’aquatique project.

“The response was lacklustre on both of the launches today,” said Louis Chan, Asia-Pacific vice-chairman at Centaline Property Agency. “The discounts and incentives offered were a test of the market” on how low prices could go, he said.

Hong Kong’s property market, which reported 28 consecutive months of soaring housing prices and sell-out launches until July, hadn’t seen such numbers in years. The developers of one project had cut their catalogue prices by 3 per cent, but that was no match for the government’s Green Form Subsidised Home Ownership Scheme, which would offer flats in Cheung Sha Wan at 42 per cent of market prices starting next month to get the tenants of public rental housing on to the property ladder.

According to the prices announced on Friday, Green Form units of between 184 and 452 square feet would cost between HK$932,500 and HK$3.06 million (US$390,000), prices not seen in Hong Kong in years.

That put the private projects in Yuen Long and Tsuen Wan at a clear price disadvantage, because their target buyers are precisely the intended recipients of the government’s discounted housing, Centaline’s Chan said.

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