Hong Kong’s smaller developers steal a march on big guns, offer discounts to offload flats before Lunar New Year holiday

Such developers ‘need to capture the market’s attention before larger developments are launched starting from March’, Midland’s Sammy Po says
Smaller firms might also be forced to sell flats at a loss because land costs have been high in recent years

Hong Kong property

Salina Li

Published: 8:00am, 10 Jan 2024

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The developers of smaller residential projects in Hong Kong are hastening sales by offering discounts before the Lunar New Year holiday, with the aim of increasing their market share before larger projects are launched later in the year.

Lofter Group, a local developer that was established in 2012 and focuses on urban renewal projects across core districts, launched Elize Park in Mong Kok East on Tuesday.

The project will have a total of 52 units, including one and two-bedroom flats ranging in size from 240 sq ft to 345 sq ft. The project’s sales brochure and price list will be made available to the public this month, with sales expected to launch before the Lunar New Year holiday at the earliest, said Carol Chow, Lofter’s founder and chairperson.

The developer is currently observing the market and expects the relaxation of the government’s property cooling measures to stabilise the situation.

“We are optimistic about Hong Kong’s property market in the mid to long term, and we will keep an eye on premium lands in core districts,” said Alvin Leung, Lofter’s director. The firm is expected to launch three to four commercial and residential projects this year.

The market generally expects that interest rates in the United States have peaked and there is a chance they will be lowered this year, which bodes well for Hong Kong’s property market as the city’s monetary authority will act in lockstep with the US Federal Reserve because of the Hong Kong dollar-US dollar currency peg, said Sammy Po Siu-ming, CEO of Midland Realty’s residential division for Hong Kong and Macau.

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Therefore, “developers of these projects need to capture the market’s attention before larger developments are launched starting from March”, Po said.

Some smaller developers might also be forced to sell flats at a loss because land costs have been high in recent years, he added. “Developers need to continue to sell – [even] at prices that are below market prices,” Po said.

The market will continue to focus on primary home sales this year, with primary transactions expected to reach around 500 to 600 deals in January, with small and medium-sized new projects dominating the sales, he added.

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Another developer looking to launch flats before the Lunar New Year holiday is Hong Kong-listed Asia Standard International. It has released the latest price list for 63 units at its High Park I project in Yuen Long.

The project is being developed in two phases and will have a total of 1,025 units. A total of 92 units out of the 623 on sale were sold during the first phase for HK$520 million (US$66.5 million).

The latest batch is being offered at a discount of 18 per cent compared to units previously sold. The average price per square foot after discounts is HK$11,797. This batch’s cheapest flat is a 327 sq ft one-bedroom unit priced at HK$3.4 million.

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On Monday, Wang On Properties released the third price list for 23 units at its Phoenext project in Wong Tai Sin. The list covers 16 one-bedroom units and seven two-bedroom flats. After a maximum discount of 30 per cent, these units are priced from HK$4.17 million to HK$6.9 million.

The cheapest unit is a 245 sq ft one-bedroom flat priced at HK$4.17 million, or HK$17,037 per square foot. The developer said the sales will be launched on Saturday at the earliest.

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