The first day of the Easter holiday has proved to be big disappointment for Sun Hung Kai Properties.
Hong Kong's largest developer by market value sold just six out of 113 flats on offer at its Park Yoho Napoli project in Yuen Long " the worst for any builder since late November when only two out of 27 units were sold at Jiayuan International Group and Stan Group's T Plus micro flats project in Tuen Mun.
Market watchers said the poor sales reflects prospective buyers' wait and see attitude, as a huge supply of small flats gets ready to flood the market in the next few months.
SHKP's move to release the flats for open sale comes just two weeks after the Real Estate Developers Association instructed its members to release 20 per cent of flats in new projects in this particular category. Developers have been criticised for increasingly selling new flats through tender, a marketing tactic that puts buyers at a disadvantage.
An aerial view of Sun Hung Kai Properties' Park Yoho Milano (right) and Park Yoho Napoli (left), on 18 Castle Peak Road in Yuen Long. Photo: Roy Issa
"The units sold cost between HK$4 million and HK$7 million," said Sammy Po, chief executive at Midland Realty's residential department. "Flats priced any higher will take longer to sell."
Some 70 per cent of the 369 units in seven projects that go on sale during the four-day holiday are being sold on the open market.
Po said open sales provide more transparency, but its effect on buyers in the current scenario remains to be seen.
On Friday, sales at Park Yoho Napoli started at 10am in the project's shopping centre, Park Circle, on a first come, first served basis.
The viewing area of the sales office was mostly empty, while a few property agents waited outside handing out fliers to entice passers-by, when the Post visited the sales office from 11:30am to 1pm.
Five groups of prospective buyers, mostly young families, were escorted to view the completed flats during this time.
In contrast to the lacklustre response for Park Yoho Napoli, Billion Development's 1,408-unit Centra Horizon project in Tai Po, has been generating quite a buzz. The flats, which go on open sale soon, has drawn hundreds of potential buyers to view the show flats.
More than 1,000 prospective buyers have signed up for the 295 units.
Centra Horizon competes with Park Yoho Napoli, which has flats ranging from 251 sq ft to 826 sq ft, priced between HK$13,793 and HK$20,963 per sq ft. The cheapest unit costs HK$4.5 million rising to HK$12.3 million.
Hong Kong homebuyers have returned to the market since March, as commercial banks kept mortgage rates unchanged amid a dovish policy stance by the city's monetary authority.
However, sales have shown signs of slowing down. On Tuesday, Henderson Land Development's Reach Summit project in Yuen Long, just sold a third of 101 units.
Park Yoho Napoli still has 600 unsold completed units. SHKP said earlier it would keep 100 units for leasing after the government said it would introduce a vacancy tax to bolster supply by stopping developers hoarding empty flats.
"The developer may need to provide more sweeteners later to boost sales as vacant units kept for more than one year will be taxed," Po said.
Separately, reservations for flat viewings in the secondary market has fallen by 3.8 per cent to 1,510 bookings on Saturday and Sunday at the 50 housing estates tracked by Ricacorp Properties.
"Since it's a four-day holiday, lots of families have as a result their homes are not available for viewing," a spokesman said.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2019 South China Morning Post Publishers Ltd. All rights reserved.
Copyright (c) 2019. South China Morning Post Publishers Ltd. All rights reserved.
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