Developer of some of Hong Kong’s smallest abodes may have sold at a loss just to clear the flats off its books to avoid vacancy tax
- Jiayuan International Group cut prices of more than 300 units at the T-Plus development, pricing them close to what it would have paid to buy into the building
Mainland property developers that arrived late to Hong Kong are discovering not everything always ends well when it comes to risk taking in the world’s least affordable market for home ownership.
The new price list, unveiled to potential homebuyers on Sunday, ignited a frenzy of deal making, with 337 units snapped up, according to the developer. The sale netted an estimated HK$1.1 billion (US$140.8 million) in receipts. Jiayuan, which owns a 70 per cent stake in the project, is likely to receive around HK$770 million from the weekend sale, according to analysts.
However, it is not clear whether Jiayuan made a profit on the project.
“It is possible [some flats of] the project do not make money,” said Sam Chi-yung, a strategist at brokerage Springwaters Financial Securities.