Hongkongers continued their buying spree at New World Development’s latest residential development in Tai Wai in the New Territories, snapping up all of the units offered on Monday, according to property agents.
The brisk sales appear to have emboldened some rival developers to raise their prices on units to be released into the market in the coming days. The strong appetite in such big-ticket items comes as a pleasant surprise to analysts, given the city’s surging unemployment rate and record job cuts at flag-carrier Cathay Pacific Airways in recent weeks.
Behind the new-found optimism is the latest assessment from one of the city’s top officials. Hong Kong’s economic recession abated last quarter, Financial Secretary Paul Chan Mo-po suggested on Sunday. The decline in third-quarter economic output should narrow with “significant improvement” in exports in September, he wrote on his blog.
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“It will give developers more confidence [given] the pent up demand in the market,” said Victoria Allan, founder and managing director of Habitat Property. “There will be confidence, but still cautious because of [the state of] the economy.”
Buyers had taken all 197 flats at The Pavilia Farm project as of 8pm local time, according to Sammy Po, chief executive of Midland Realty’s residential division. The developer sold all 181 units on offer on Sunday, in addition to 391 units in the preceding weekend.
New World Development has so far sold 767 units at the project, earning HK$8.4 billion (US$1.1 billion) in sales.
“Together with other sales of projects, the group has pulled in HK$10 billion of contract sales, accounting for 50 per cent of its target HK$20 billion for the financial year 2021,” said Adrian Cheng, New World’s executive vice-chairman.
The Pavilia Farm will have 3,090 units in total, stretched over a seven-year development. In the first three days of sale, New World has sold 570 units worth HK$6.7 billion, according to Akan Wong, general manager of sales and marketing at the developer. The units range from 278 to 835 square feet, and are priced at HK$21,560 (US$2,782) per sq ft after discount.
In the latest round of sale, 60 per cent of buyers were from other areas in New Territories, and 30 per cent were from Kowloon. About 70 per cent of the buyers are owner-occupiers, while 30 per cent are buying the flats for investment purposes, said Wong.
“Ten per cent of our clients wanted to buy two flats at the project,” said Louis Chan Wing-kit, vice-chairman and chief executive of residential in Asia-Pacific at Centaline Property Agency. Industry-wide, about 1,000 flats have been sold in the city, he said. Another 2,100 units are likely to be sold in November, which could be the best month in 2020, he predicted.
The rush at the Pavilia Farm has encouraged other developers to take advantage of the buoyant sentiment.
Hongkong Ferry Holdings has raised prices for the second batch of 62 units at Starfront Royale in Tuen Mun by 13 per cent to an average of HK$16,500 psf. CK Asset marked up 28 units at El Futuro in Kau To Shan in Sha Tin by 4.7 per cent to HK$18,561 psf. Both projects have not announced the official launching dates.
“The brisk sales are within expectations, as the local Covid-19 situation has improved,” said Martin Wong, associate director, research and consultancy, Greater China, at Knight Frank. “It is expected that strong first-hand home sales will continue, but prices would remain stable. There’s still strong competition among newly launched projects.”