Latest asking prices lower at Festival City

HONG KONG: Cheung Kong (Holdings) (SEHK: 0001) has cut prices and lowered the required down payment to lure buyers to Festival City in Tai Wai amid concerns the development is not selling as well as expected, property agents say.

The asking price for a 980 square foot unit on the 33rd floor of South Court at Block 3 was HK$9.417 million, or HK$9,609 per square foot, when the developer launched the first batch of units last Friday.

By contrast, a 1,030 sq ft unit on the 32nd floor of North Court in the same block was released for sale this week at HK$7.927 million, or only HK$7,696 per sq ft.

"The units at South Court launched last week enjoy a view of Lion Rock, which is better than the units launched this week, but the difference in view should not lead to such a big difference in price," said one property agent.

Cheung Kong executive director Justin Chiu Kwok-hung denied yesterday that the developer was cutting prices. He said the apartments with a better view should sell for a higher price.

Meanwhile, the developer has announced a new financing plan. Purchasers under the plan need only pay a down payment of 15 per cent within 180 days after they sign a preliminary sales and purchase agreement, compared with 20 per cent previously, and also enjoy a 2 per cent discount from the list price.

An agent said the new plan could attract investors looking for a short-term investment. "Their investment costs would be lowered," he said.

Property agents estimated about 60 per cent of buyers who bought the units last week were investors. The developer has sold more than 350 units since it launched last Friday, less than the market had expected.

Ricacorp Properties' head of research, Patrick Chow Moon-kit, said sales at Festival City were adequate.

"The market overestimated sales, and you can't expect the developer to sell a thousand units in the first stage," he said. "There were only 6,800 new and secondary flats worth more than HK$10 million sold last year, 5.9 per cent of the total transaction volume. Cheung Kong has sold hundreds of units worth more than HK$10 million in a few days."

He said the demand for housing remains strong, but developers would face challenges if asking prices were too high.

Centaline Property Agency research shows 826 flats at 10 major housing estates were sold in March, 59 per cent more than in February. --
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