In a year when Hong Kong protests have clipped overall home sales in the city, a relative newcomer has made it into the big league by “right timing” and snared some market share from Sun Hung Kai Properties and other developers.
Billion Development & Project Management sold HK$15.6 billion (US$2 billion) worth of homes last year, giving it a 7.9 per cent share of industry sales, according to Dataelements, which compiles data based on sales reported to the government. The amount was the third highest by any developer in 2019.
The builder is the fresh face on the annual list dominated by the triumvirate of Sun Hung Kai Properties, Wheelock Properties and Henderson Land, who all saw slimmer takings. Combined sales by the city’s 15 top developers slumped 19.4 per cent to HK$149 billion, as anti-government protests swept across the city in the second half of last year.
“Billion Development got the right timing in marketing its two residential projects,” said Joseph Tsang, chairman of JLL in Hong Kong. “One generated a strong response in April, while another in August performed well before the social movement escalated into some violence.”
Buyers swarmed its two projects, the Centra Horizon in Tai Po and The Aurora in Tsuen Wan, and signed up for 1,589 units of 70 per cent of the available units. The developer captured sales in Tai Po near the market peak in May, while some discounting in August lifted take-up rate to 98 per cent in the Tsuen Wan project.
Despite poorer sales, Sun Hung Kai Properties remained the industry’s top-dog in 2019. Its sales of HK$36.93 billion represented a 26 per cent drop from a year earlier, the first reverse since 2015.
Wheelock’s sales fell 8 per cent to HK$21.48 billion, while Henderson Land recorded a 14 per cent drop to HK$9.24 billion.
“The social unrest hampered buying activity for most of the second half,” said Vincent Chan, the chief executive of property agent Qfang. “Some developers had to defer their launches, particularly luxury residential projects, amid uncertainty over the city’s long-term political environment.”
Last year is likely to be a blip, according to Tsang at JLL. Normal order will be restored as Billion Development could slip out of the ranking this year as its residential land bank depletes and the company’s focus shifts to the commercial sector.
For other developers, they should be able catch up on sales now that social movement becomes less violent, according to Centaline Property Agency. The average price of new homes has also cheapened after a slide last year.
“At least, we do not see a widespread traffic disruption in recent weeks,” said Louis Chan, vice-chairman of Asia-Pacific and chief executive of residential division at Centaline. “Prospective buyers have been able to visit the showrooms.”
The early signs are encouraging. Sun Hung Kai Properties has sold 690 of the 710 units at Wetland Seasons Park in Tin Shui Wai in the opening two weekends this year, with support from banks.
“Lenders have ample quota to fill in the early part of the year,” Chan said.