26 August 2019
As property demand remains high despite stratospheric prices, Hong Kong's developers make hay. Photo: Bloomberg
As property demand remains high despite stratospheric prices, Hong Kong's developers make hay. Photo: Bloomberg

What the first 2018 home sale launch tells us about the market

There aren’t too many eyebrows being raised as Sun Hung Kai Properties launches its first residential project in Ma On Shan that will see units priced at nearly HK$17,000 per square foot on average.

Comprising homes of various sizes, the project will see the smallest among the units — measuring just about 380 sq ft — sold at a minimum of HK$6.2 million. 

Call it the new normal, given the crazy property landscape in the city. 

And let’s not forget that the project is from Hong Kong’s biggest developer, which has seen units at its residential project “Victoria Harbour” at the North Point waterfront command three-fold premium.

Still, it is Ma On Shan, a far and away district with the Wu Kai Sha terminal station, almost an hour away from Central and not known for good food – perhaps because it is just too far for anyone to work there.

(Find a time to go there – it has arguably the most beautiful harbourfront and involves a friendly 90-minute walk from Shatin which I tried over Christmas)

Anyway, Sun Hung Kai Properties has priced the “St Barths” project, which offers 353 units of all sizes, at almost 17K psf. Stripping off the discount, it is about 20 percent higher than what it first offered 10 months ago, and is about 17 percent higher than the secondary market price in the neighborhood.

Knowing it can probably sell like ice-cream even in the winter, Victor Lui, deputy managing director of SHKP, described the St Barths prices as “incomparable”.

Well, what can you complain? We just went through a 20th straight month of surge in home prices in the city, which made it the longest uptrend cycle since the Rating and Valuation Department kept records since 1993.

And the trend will probably continue at least as long as the stock market remains on a roll.

A unit measuring 431 sq ft at Kam Fung Court, a home ownership scheme project in Ma On Shan, was just transacted for HK$5.72 million, or about HK$13,270 psf. The seller bought the unit for HK$4.18 million and sold it for 37 percent return.

Seizing the opportunity, Sun Hung Kai’s rivals Henderson Land and New World Development raised prices for their joint-venture project Double Cove in Wu Kai Sha by as much as 13 percent to the range of HK$16,000 and HK$18,000.

Well, we can’t really blame them. Who, after all, will want to miss out on the party! 

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EJ Insight writer

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