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HONG KONG: Buoyed by solid buyer demand for a luxury development in Aberdeen, and a rebound in the stock market, a number of developers hope to cash in on improved market sentiment by launching pricey projects.
Developer K Wah International has indicated it will raise prices for its luxury residential development, Marinella, in Sham Wan, Aberdeen, after selling 210 of the 255 flats released this month in the first phase of sales at an average price of HK$20,000 (RM7,915.69) per square foot.
Encouraged by that response, Sun Hung Kai Properties announced it would release 50 flats for sale at The Wings, above the Tseung Kwan O MTR station, at an average price of HK$12,698 per square foot. A 2,560 sq ft flat with rooftop, private pool and two car parking spaces will be offered at HK$51.2 million, or HK$20,000 per square foot.
The prices at The Wings are pitched above those of deals completed at The Waterfront in Kowloon Station at an average price of HK$11,111 per square foot.
They are also priced higher than those of five Taikoo Shing flats sold last week, which fetched an average of HK$9,641 per square feet.
SHKP says the flats will be put on sale as early as tomorrow.
Sino Land will today release 58 homes at One Mayfair in Kowloon Tong - a traditional luxury address - at prices that will range between HK$15,686 and HK$20,808 per square foot, with flats priced between HK$21.2 million and HK$45 million.
On Tuesday, the developer released an additional three homes - two with gardens and one with a roof garden and ranging in size from 1,607 square feet to 2,436 square feet - priced at between HK$27,600 and HK$29,380 per square foot. The 2,436 sq ft flat with 1,333 sq ft roof garden commands the highest price per square foot of the three, and costs HK$71.56 million.
Wing Tai Properties is stepping up marketing of its luxury development at 9 Warren Street in Tai Hang, agents said.
"To take advantage of the improved atmosphere, more developers will release their luxury developments in coming weeks. The strong sales outcome at Kowloon Tong and Tseung Kwan O will further boost the prospects of the luxury residential sector," said Sammy Po Siu-ming, a director at estate agency Midland Realty.
Also boosting the confidence of developers who are about to release their luxury projects is the performance of the Hong Kong stock market. After a sustained fall that took the benchmark Hang Seng Index to a low of 17,983 points last Thursday, the index had rebounded to 18,968.2 points by the close yesterday.
But market sentiment remained cautious, said Po, and the reaction to the release of the two latest luxury projects was not likely to be as positive as that for new mass-housing projects, which attracted hundreds of buyers on their launch day.
"There won't be a big volume of sales, as most of these flats cost more than HK$20 million," he said.
While there were many cash-rich buyers who did not need to raise mortgages, the limits on home loans could weigh on sales, said Po. The maximum loan-to-value ratio for mortgages on properties costing HK$10 million or more was lowered from 60% to 50% in June. Nonetheless, SHKP had pitched The Wings at prices close to those being paid at nearby Kowloon Station, indicating that it was confident about the attractions of its brand name and the quality of the project, Po said.
"It aims to reinvent The Wings as another Cullinan at Tseung Kwan O, but offering units at half of what it achieved at Kowloon Station."
The average launch price at The Wings is 47% lower than the HK$24,300 per square foot for which properties in The Cullinan at Kowloon Station sell on average.
The Wings, comprising 1,028 flats, is part of an integrated development that includes two hotels - a Crowne Plaza and a Holiday Inn Express - grade A offices and a shopping mall.
Lee Wee Liat, regional head of property research at Samsung Securities, noted SHKP's strategy was to launch in "reverse order".
"They put out the most expensive units first and then gradually sell those units at lower prices. They think it will be much easier to sell the higher-end units as they are still bullish on the luxury sector while cautious on the mid- to mass market segment," he said.
Cheung Kong (Holdings) said it might release the remaining three-bedroom flats at La Splendeur in Tseung Kwan O over the weekend.
A K Wah spokesman said that about 30% of the Marinella buyers were mainlanders.
Derek Lau, a sales director for Centaline Property Agency's southwestern district, said flats at Marinella were being offered at about 13% less than the HK$23,000 per square foot the market had expected.
"Most buyers will hold for long-term investment or leasing to bet on a further increase in prices. Investors account for 50% of buyers," he said.
Lau said sales in the secondary market in the district had dropped as much as 30%, as market attention turned to the primary market whenever a new development was released for sale. — SCMP
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