Sun Hung Kai sells all 188 units at Novoland, a sign housing sentiment is rebounding in Hong Kong

Units at Novoland phase 2A ranged from 245 to 705 sq ft, and after discounts were priced between HK$3.35 million and HK$9.41 million
The number of property deals fell 8.2 per cent to 5,284 last month, compared to 5,755 in April, a third lower year-on-year

Hong Kong property

Mia Castagnone

Published: 5:35pm, 10 Jun 2023

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Sun Hung Kai Properties sold all 188 units of its Novoland project in Tuen Mun on Saturday afternoon, as attractive prices drew first-home buyers to the new development.

Units at Novoland phase 2A consisted of one to three-bedroom units, ranging from 245 to 705 sq ft. After discounts, they were priced between HK$3.35 million and HK$9.41 million.

The sale began at 10am and by around 3pm all 188 units had been snatched up. More than 5,000 potential buyers registered their interest, according to property agency Centaline.

Sammy Po Siu-ming, CEO of Midland Realty’s residential division for Hong Kong and Macau, said the quality of the project’s amenities drew a large number of buyers, while the rental yield also provided an attractive selling point.

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“With an expected rental yield of HK$42 per sq ft, the property is welcomed by homebuyers and investors,” Po said, adding that young buyers accounted for most customers.

The pricing is attractive for first time home buyers and lower than market rate in the neighbourhood, he said.

The sell-out came as property transactions in Hong Kong slid to a four-month low in May, as developers avoided new launches amid weaker buyer sentiment, following months of persistent interest-rate hikes.

“The sales sentiment has been improving, especially for new sales, while developers have been conservative in the pricing,” said Martin Wong, head of research and consultancy for Knight Frank’s Greater China.

The number of property deals fell 8.2 per cent to 5,284 last month, compared to 5,755 in April, a third lower year-on-year, according to data from the Hong Kong Land Registry. The total value of May transactions amounted to HK$44.56 billion (US$5.7 billion), a decrease of 30 per cent from the previous month.

Last month, the city’s biggest lenders raised their prime rates by 12.5 basis points to a fresh 15-year high, following another round of policy tightening by the Hong Kong Monetary Authority (HKMA).

People wait in line to buy units at SHK’s Novoland development, at the IFC in Kowloon, Hong Kong. Photo: Xiaomei Chen

Including the latest move, Hong Kong’s commercial banks have now raised their prime rates by a total of 75 basis points since the US Federal Reserve began its “lift-off” in March last year, while central bank rates have jumped by a cumulative 500 basis points.

Despite rising interest rates, some cashed-up customers bought two properties, according to Louis Chan, vice-chairman and CEO of Centaline’s residential department in Asia-Pacific. The double buy of a two-bedroom flat cost about HK$13.4 million.

Meanwhile, interest rates have led to a near stall of prices of Hong Kong’s lived-in homes. The overall home price index rose 0.5 per cent month on month to 354.2 in April, the lowest since prices bottomed out in December, according to data from the Rating and Valuation Department.

While property prices have risen 5.8 per cent so far this year, on an annual basis they were still down 8 per cent. Aggressive pricing schemes from developers looking to move rising inventories, higher interest rates, and the sluggish performance of the Hong Kong stock market are seen as leading factors in the secondary market slowdown.

Additional reporting by Yulu Ao and Cheryl Arcibal