Hong Kong's property buyers defied a tropical cyclone and the 11th day of triple-digit confirmed coronavirus cases to snap up new homes launched by one of the city's largest developers, underscoring the resilience of the real estate bull market.
Henderson Land Development sold all 185 units offered at its Seacoast Royale project in Tuen Mun as at 7:30pm, agents said. As many as 8,563 registrations of intent were received, which means an average of 46 people put down deposits to qualify to bid for each of the flats on offer.
“Flats of such pricing are popular among buyers,” said Sammy Po, chief executive at residential division at Midland Realty. “They kept submitting registrations of intent, despite the third wave of virus infections. They still came out to [view and bid for] the flats today.”
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The overwhelming response for Henderson’s new project goes some way to illustrate why Hong Kong’s property prices have held up against the city’s worst economic recession on record, as a flood of cheap financing unleashed by global central banks including Hong Kong’s monetary authority attracted investors to park their money in fixed assets. June’s price index of lived-in homes rose to a 10-month high on Friday, according to government data.
Prices of the 611-unit Seacoast Royale project, developed by Empire Group Holdings and Hong Kong Ferry (Holdings), start at HK$2.91 million (US$375,000) for a studio unit measuring 207 square feet (19.2 square metres), the cheapest price for new projects in 18 months. Ava 228 in Sham Shui Po, a collection of some of Hong Kong’s tiniest abodes, offered a micro-apartment of 151 sq ft for HK$2.8 million in February 2019.
The average price of the 185 flats on offer today at Seacoast Royale is HK$13,638 per sq ft, or 27 per cent cheaper than Sun Hung Kai Properties’ Regency Bay in the same neighbourhood, which sold just 35 of 55 flats on offer on Friday.
One buyer forked out HK$22.74 million for four flats at Seacoast Royale, said Henderson’s sales general manager Thomas Lam.
Buyers are flocking to snap up new flats because of the low interest rates prevailing in Hong Kong, and the depreciation of money amid the global quantitative easing by central banks, Po said.
“The project is also cheap relative to nearby projects,” said Po. “Buyers are afraid that home price would still climb after the pandemic. So they would buy when it is cheap now.”
The pace of new projects being launched may slow in the coming months, as the third wave of coronavirus outbreaks in the city deters people from holding mass gatherings, Po said. Fewer than 1,000 new homes may be sold in August, agents said.
The project’s low starting price and mortgages of high loan-to-value ratio encouraged buyers, said Louis Chan, Asia-Pacific vice-chairman and chief executive at residential division at Centaline Property Agency.
This project is “even better than Home Ownership Scheme ones” so buyers were rather enthusiastic, said Chan.
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