Sun Hung Kai Properties bows to slumping market, pricing flats near protest-hit Sham Shui Po at 2017 rates

Hong Kong’s biggest developer, Sun Hung Kai Properties, has bowed to the pressure of a slumping housing market, pricing a batch of flats near protest-hit Sham Shui Po about 25 per cent below the prevailing market rate.

The builder priced the first 235 flats at its Cullinan West III project in Nam Cheong at an average of HK$21,722 (US$2,770) per square foot after discounts – a quarter less than units sold recently in nearby estates. The price is about the same as it was two years ago for units in the second phase of the same development.

The low prices, the latest to be offered for a string of projects, point to caution among big developers as market sentiment in the city remains under assault from anti-government protests and the US-China trade war, analysts said.

“These prices are a step back in time. As the local housing market has slowed down in recent months, we have adjusted the prices of Cullinan West III,” said Victor Lui, deputy managing director at Sun Hung Kai Properties. “Affected by social unrest and the US-China trade war recently, the wait-and-see sentiment among potential buyers has increasingly prevailed.”

The price is comparable to the first batch of flats at the estate’s phase two, offered at HK$21,152 per square foot in November 2017, and is down 9.1 per cent from the last launch in August 2018.

“The new project has been priced with restraint, at a discount of about 25 per cent compared to new major lived-in estates near the Olympic station,” said Louis Chan, Asia-Pacific vice-chairman and chief executive of the residential division at Centaline Property Agency.

Just three hours after Sun Hung Kai revealed the new prices, the city’s second largest developer, CK Asset, offered a more flexible payment plan and loan arrangement for the remaining 20 flats at its Seanorama project in Ma On Shan, its first property sale in Hong Kong this year.