Hong Kong buyers rush to snap up the cheapest new homes in 7 years, as 15pc discounts helped CK Asset sell all 626 flats at Coast Line II
- The property giant owned by billionaire Li Ka-shing sold all 626 units on offer at the current phase of the Coast Line II apartments as of 9pm, sales agents say
- Some 7,000 prospective buyers had lined up outside the sales office in Hung Hom ahead of the start of on-site registration at 9am
Hong Kong’s homebuyers rushed to seize the cheapest new flats on sale in seven years, delivering a clear sign to developers that discounts are the best tools for surviving the doldrums in the city’s property market.
CK Asset Holdings sold all 626 units of the Coast Line II apartments in Yau Tong on offer in the current phase as of 9pm, according to Sammy Po Siu-ming, CEO of Midland Realty’s residential division for Hong Kong and Macau.
Hundreds of prospective buyers started to line up outside the sales office in Hung Hom as early as 8am, before they were joined by some 7,000 others who formed a queue that extended all the way from the atrium of the Fortune Metropolis mall to the Hung Hom MTR station and the pedestrian bridge connected to Hong Kong Polytechnic University.
“We are happy about the number of people coming today,” said Justin Chiu Kwok-hung, CK Asset’s executive director, who arrived on site soon after registration began at 9am
“The popularity of new flats shows that although the overall market sentiment is quiet, the public has no lack of purchasing power, but rather a lack of confidence in the future market,” Louis Chan Wing-kit, CEO of the residential division at Centaline Property Agency, said at the sales site.
Tammy Zhang, 30, who came to Hong Kong from mainland China eight years ago, was one of the lucky buyers. She snapped up a 210 sq ft studio for around HK$3.2 million as an investment, describing the price as similar to a government-subsidised Home Ownership Scheme flat, “but brand new with a clubhouse”.
“It’s a really good price,” she said, adding that she saw great leasing potential in the Coast Line II project due to the influx of mainland talent to Hong Kong. She expects to rent out her flat for around HK$13,000 a month.
Jason Lai, 29, said he hoped to buy a one-bedroom unit for himself, priced at around HK$4 million. He said this was the first time in years that he had considered buying a newly launched flat.
Lai said he also looked into other developments in Yau Tong, but was attracted by the relatively low prices at Coast Line II.
“You cannot say it’s a good price, it’s just normal,” he added.
Developers have been discounting flat prices by 1 to 3 per cent below market levels since the third quarter of last year, according to Buggle Lau Ka-fai, chief strategist at Midland Reality.
‘No price war’: Hong Kong developers brush aside fears of a property crash
He anticipates that developers will price new units at 10 per cent below market levels in the third quarter this year as they strive to attract buyers and stimulate sales.
The cheapest flat at Coast Line II, which lies about 10 minutes from an MTR station in the southeastern corner of Kowloon, is a 210 sq ft studio on offer for HK$2.9 million, or HK$13,810 per sq ft, after an 18 per cent discount. The sales proceeds from all units are expected to reach HK$4.67 billion.
Henderson Land Development, which also launched on Saturday another round of sales of its Baker Circle Greenwich development in Hung Hom, sold only eight out of 40 units on offer as of 9pm, according to Midland Realty’s Po.
The cheapest flat at that project is a 215 sq ft studio priced at HK$3.75 million, or HK$17,473 per sq ft, after discount.
Hong Kong’s powerful guild of property developers allayed fears of a price war in the home market.
“Every developer has different strategies to sell their new residential projects, and CK Asset just chose to quickly sell [these units] by offering some discounts, ” said Stewart Leung Chi-kin, chairman of the executive committee of the Real Estate Developers Association of Hong Kong.
Whether other developers will also follow CK Asset’s strategy will depend on their projects’ locations or how “financially desperate” they are, according to Joseph Tsang, chairman at JLL Hong Kong.
If the inventories’ locations were surrounded by plenty of supply, it would not be a surprise that these developers would also adopt a similar strategy, he added.
