Developers in Hong Kong are releasing homes at price levels not seen in the past five years, offering an array of incentives to attract buyers before anticipated increases in interest rates and supply.
Sweeteners like mortgage discounts, dining vouchers, and travel vouchers to destinations like the Maldives are being employed to drum up sales. According to Louis Chan, the Asia-Pacific vice-chairman at Centaline Property Agency, many developers are launching properties at prices close to or even lower than the market price, ultimately benefiting buyers. However, second-hand owners may face challenges.
Henderson Land Development plans to offer the first batch of 148 flats in Henley Park in Kai Tak at an average of HK$21,088 per square foot after discounts. This price is 15% cheaper than the remaining stock of new homes in the same district, including Henderson's The Henley. Grand Ming Group has priced 30 flats at The Grands in To Kwa Wan at an average discounted price of HK$18,526 per square foot, with 24 flats priced under HK$5 million. Hip Shing Hong (Holdings) has priced the initial batch of 50 units at the 156-unit Oria in Shau Kei Wan at an average of HK$23,042 per square foot after discounts, the lowest for a new project on Hong Kong Island since 2018.
As interest rates rise, developers are striving to offer competitive prices to entice buyers. Thomas Lam, general manager of sales at Henderson, believes it is an opportune time for buyers to enter the market, as demand is expected to increase in the second half of the year, leading to higher prices.
To unload remaining stock, developers and agencies are employing various marketing strategies. Swire Properties plans to offer an additional 5% discount for three flats at Eight Star Street in Wan Chai for a limited time. Mortgage brokers are offering high rebates for Hibor-linked mortgages, and companies like Centaline, Midland Realty, Henderson, and Hong Kong Property Services are providing travel and dining vouchers to attract buyers.
Despite a decline in new home sales in May, Ricacorp Properties expects transactions to rebound to over 1,000 this month. Home prices experienced a 15% decrease in 2022, and developers continue to cut prices, indicating that the recovery of the economy will take time.
By fLEXI tEAM