Date
8 December 2016
Swire Pacific is offering 12 units at Whitesands, its exclusive residential enclave in Cheung Sha on southern Lantau, for HK$33.7 million to HK$60.56 million each. Photo: HKEJ
Swire Pacific is offering 12 units at Whitesands, its exclusive residential enclave in Cheung Sha on southern Lantau, for HK$33.7 million to HK$60.56 million each. Photo: HKEJ

Swire bucks trend by slashing home prices on Lantau

One can never figure out Swire Properties.

Just when everyone is raising prices for their autumn harvest from wealthy mainland uncles, the British luxury property developer chose to slash the rates for its high-end project on Lantau Island.

Also, did they miss the front page story about its mainland peer HNA Group (whose Hainan Airlines also competes with its Cathay Pacific) buying a lot in Kai Tak for a record price?

Not sure, but what we know is that Swire sold a nearby site in Kowloon Bay last Friday for what now looks like a bargain price.

On Thursday the property arm of Swire Pacific offered a dozen homes at Whitesands, its exclusive residential enclave in Cheung Sha on southern Lantau, for HK$33.7 million to HK$60.56 million.

The latest offering is priced at HK$15,851 to HK$24,426 per square foot, or around 20 to 30 percent below the prices set during its initial launch last year. Each unit is 1,954 to 2,598 square feet.

In September 2015, Swire Properties tried to lure homebuyers by selling 24 homes, including the 12 units in its latest offering, for a minimum of HK$48.5 million each.

Its reasoning probably was that it would be hard to sell those units which are situated on a small island nearly an hour away by ferry from Central.

What happened during the intervening months?

The property market went into a bitter winter. Well, at least until it saw a sharp rally in the summer with many developers raising prices to capitalize on the rising demand from anxious buyers.

The latest Centa-City Leading Index, which tracks secondary home prices in 100 estates, rose 1.8 per cent to 144.09 for the week ending Oct. 23, compared with a week earlier, or just 2 percent below their peaks in September last year.

The price surge can be partly explained by the pent-up demand after Brexit which saw capital chasing property assets, but a bigger part of it could be traced to the growing appetite of Chinese investors.

From small homebuyers to multinational corporations, the Chinese are snapping up Hong Kong assets like there will be no more left tomorrow.

Amid worries over the renminbi’s continued devaluation, many Chinese investors found a nice way to hedge their bets by aggressively buying home or land in Hong Kong, although in both cases, they need to pay double stamp duty or as much as 15 percent.

On Wednesday HNA Group won the auction for a land parcel in Kai Tak for HK$8.84 billion, or about HK$13,500 per square foot.

The price is more than double the cost of a nearby site that was acquired by Poly Properties two years ago for HK$3.92 billion, or HK$6,530 per square foot.

If Kai Tak can yield such a high price, so will Lantau Island as both areas are not accessible by MTR.

Expect more expatriates jostling with mainland buyers for luxury homes on Lantau.

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BK/AC/CG

EJ Insight writer

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