Hong Kong property set to become ‘buyer’s market’ in the first quarter

Competition among developers in Hong Kong is set to pick up with as many as 5,000 new flats ready for launch in the first quarter of 2017.

Sun Hung Kai Properties (SHKP) and China Overseas Land & Investment (Coli) are expected to kick off the sale of their new projects in Yuen Long and Kai Tak area with a combined 1,450 units shortly.

“Developers will accelerate their flat sales this year. They had deferred the marketing of new project launches after the government suddenly raised the stamp duty in November last year,” said Derek Chan, head of research at Ricacorp Properties.

With ample new supply this year, he expects developers’ pricing will be competitive in selective areas in a bid to speed up sales.

Coli released the sale brochures of its 624-unit One Kai Tak phase two development in Kai Tak on Monday, three days after Sun Hung Kai Properties, the city’s largest developer, opened show flats at its 826-unit Grand Yoho phase two development in Yuen Long for media viewing.

“Developers are certainly facing pressure on their pricing strategies, especially in areas with various new projects ready for sale,” he said.

Competition for potential buyers is set to intensify in Tsuen Wan, Kai Tak area and Kau To Shan in Sha Tin which are major sources of new supply this year, he said.

In Tsuen Wan, three projects totalling 2,906 units are pending pre-sale. Both Cheung Kong Property’s 970-unit The Ocean Pride and Chinachem Group’s 953-unit in a yet-to-be-named development are located adjacent to the West Rail’s Tsuen Wan West station.

Also in Tsuen Wan is the 983-unit The Pavilia Bay, a joint venture between New World Development and Vanke Property (Overseas).