Hong Kong’s homebuyers snapped up the most expensive residential property project that launched in the Tseung Kwan O district on Saturday, persuaded by discounts and flexible payment terms to ignore the risks of a recession and escalating US-China tensions.
Sea To Sky, a new project by CK Asset Holdings Limited at Lohas Park, sold 456 of the first 462 flats offered for sale at 10pm, with 28 people submitting bids for every available unit, according to sales agents. The average price of the project, scheduled for delivery to buyers in February 2022, is HK$15,823 (US$2,042) per square foot after a 10-per cent discount for the first 285 flats in the lot.
Prices start at HK$6.4 million for a two-bedroom flat measuring 471 sq ft, going up to HK$17.7 million for a four-bedroom unit of 1,077 sq ft. That sets the average price of the largest development in Lohas Park about 21 per cent over the prevailing price of lived-in homes in the neighbourhood, according to Centaline Property Agency’s data.
Sea to Sky’s discounts at launch are “reasonable”, underscoring the developer’s strategy of “offering prices close to or lower than the market price to attract buyers in the first batch, to be followed by raised prices for the second and third batches,” said Sammy Po, chief executive of Midland Realty’s residential division.
As many as 12,896 buyers registered with financial deposits to vie for discounts allocated for the first 285 of the 462 offered for sale. In all, the project comprises 1,422 flats.
The strong showing by CK Assets, one of Hong Kong’s bellwether property developers, draws a stark contrast to failed attempts as recently as three weeks ago when China Evergrande failed on its fourth attempt to attract buyers to its Emerald Bay project in Tuen Mun.
Hong Kong’s residential property market is struggling to find its footing, after a decade-long bull run was stopped in its tracks by more than a year of anti-government protests, an unceasing US-China trade war and the city’s worst recession on record brought by the coronavirus pandemic.
The city’s average residential property price has fallen by 5.4 per cent from its May 2019 peak, and analysts are forecasting declines of between 10 per cent to 20 per cent this year. Developers are expected to sell 15,000 flats this year, only half of the residential units to be launched, according to forecasts.
Joblessness in the city rose to a 15-year high of 5.9 per cent in the two months ended in May, while the city finds itself entangled in the deteriorating relations between the US and China over everything from trade disputes to technology rivalry, and over the Chinese legislature’s national security law for Hong Kong. Last week, the US Senate passed a bill that could sanction China over the proposed security law for Hong Kong, followed by visa restrictions overnight on unnamed Chinese officials involved in the law.
“Political events such as US sanctions have a minor impact on the housing market based on previous experience,” Po said.
To drum up interest, CK Asset offer potential buyer flexible payment terms, requiring them to deposit a sum equivalent to 5 per cent of the discounted price to secure a property, cheaper than the usual 10 per cent. Buyers who opt for this cheap down payment scheme are eligible for a smaller discount of 3 percentage points compared with others, agents said.
“Sales will pick up in the second half to around 11,000 units, up from 7,000-8,000 units in the first six months,” Po said, estimating that prices for the city will rise 5 per cent this year. “The first half was affected by the pandemic as few new projects were available for several months [during the peak of the pandemic].”
Sun Hung Kai Properties’ Wetland Seasons Park in Tin Shui Wai recorded strong sales on June 6, the same day when the more expensive Ocean Marini flats by Wheelock and Co in Tseung Kwan O posted disappointing sales.
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