Hong Kong’s property buyers shrugged aside a relapse of coronavirus infections to snap up new homes launched in two locations, giving legs to a tentative recovery in the city’s residential real estate market.
Wheelock Properties sold 85 flats at the Koko Hills project in Lam Tin for a total haul of HK$1.02 billion at 6:30pm, or 53 per cent of the 160 units offered, even as the project’s average price of HK$19,995 per square foot was about 15 per cent higher than the most recent new launch in the neighbourhood. Separately, CK Asset Holdings managed to clear 97 of 285 apartments in the third round of sales at its Sea To Sky complex at Lohas Park in Tseung Kwan O, according to sales agents.
“The recent home price index is already higher than the beginning of this year, so the [adverse] impact of the [coronavirus] outbreak on home price has been over,” said Wheelock’s Managing Director Ricky Wong. “The economy may rebound from the bottom in the second half of this year. What’s more, the low-interest environment still prevails and the stock market has performed well recently, creating a wealth effect” that stimulates demand, he said.
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CK Asset, one of the city’s bellwether developers, kicked off the current bull run when it launched its project with the highest price in Lohas Park two weekends ago. Encouraged by strong response to CK Asset’s launch, Wheelock priced Koko Hills higher than Sino Land’s Grand Central nearby in Kwun Tong launched in December 2018. It is even 43.8 per cent higher than the average secondary market price of HK$13,905 per sq ft for the nearby lived-in estate Laguna City, according to data from Centaline Property Agency.
Still, up to 1,400 people registered to bid for Koko Hills, nearly nine buyers for each available flat, which starts at HK$7.87 million (US$1.02 million) for a unit measuring 366 square feet (34 square metres). Two of every three flats in the first round launched were priced above HK$10 million.
Abodes “priced more than HK$10 million have lower loan-to-value ratio,” which require buyers to put down more money upfront, said Louis Chan, Asia-Pacific vice-chairman and chief executive of residential division at Centaline.
The Koko Hills project comprises three phases, the first of which has 413 apartments in three tower blocks, one of which stands at 21 storeys. The developer raised the prices of its forthcoming launches to as much as HK$27,420 per sq ft.
A buyer in this 30s, who would only give his surname Cheuk, bought a three-bedroom unit at Koko Hills despite its “relatively expensive” price, because he liked its location.
Another customer bought a four-bedroom flat of 1,850 sq ft with a terrace for HK$42.5 million (US$5.48 million), or HK$22,974 per sq ft, through tender because he liked the location, layout and the clubhouse facilities, Wheelock said.
An elderly man surnamed Cheung living in Lam Tin’s Sceneway Garden bought a three-bedroom flat at Koko Hills measuring 770 sq ft for HK$16.48 million. His family said they noted “a little potential problem” about the market prospects amid the coronavirus outbreak. But since they were buying it for their own use and “already waited for many years”, they would not let that affect their decision.
Sammy Po, chief executive of residential division at Midland Realty, echoed the view that the recent uptick in coronavirus infections has made more reluctant to view flats, reducing his estimate of secondary market transactions by over 10 per cent to some 3,500. A small number of buyers also backed off from the sales of Koko Hills and Sea To Sky, Po added.
Elsewhere, China Evergrande sold 54 flats at The Vertex in Cheung Sha Wan on Friday after slashing prices by up to HK$218,000, offering discounts and stamp duty rebates of 3 per cent each as well as offering mortgages of high loan-to-value ratio.
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