Hong Kong developer Sun Hung Kai Properties is set to sell a new batch of flats in its latest project in Tuen Mun at a discount of up to 17 per cent compared with previous phases, as builders continue taking advantage of an uptick in buyer sentiment to clear inventory.
Novo Land phase 3B comprises two buildings with 769 units. The first price list of 154 units in the phase, released on Tuesday, has an average price of HK$11,598 per square foot – 12 to 17 per cent lower than the first price lists for the project’s previous four phases.
The list includes 10 studios, 10 one-bedroom units, 114 two-bedroom flats and 20 three-bedroom units, ranging from 252 to 543 sq ft. The homes are priced between HK$2.99 million (US$382,850) and HK$6.34 million after discounts, which translates to HK$11,079 to HK$12,290 per square foot.
Hong Kong property developers are hastening sales of new residential projects to reduce inventory as optimism that interest rates will fall this year is boosting buyer sentiment. Buyers should continue to enjoy strong purchasing power for new flats this month, with the number of first-hand transactions in June reaching 1,400 to 1,500, similar to May, said Sammy Po Siu-ming, CEO of Midland Realty’s residential division for Hong Kong and Macau.
The cheapest flat in the new Novo Land price list is a 252 sq ft open studio, priced at HK$2.98 million, or HK$11,856 per square foot.
The price list comes in nearly 13 per cent below that of phase 2A, which landed in November before Hong Kong’s long-time property cooling measures were withdrawn, said Louis Chan Wing-kit, CEO of the residential division at Centaline Property Agency.
The sub-HK$3 million price of the smallest flat is rare for large-scale projects in the district, he added, and the discounts show the developer is determined to offload inventory and use low prices to kick-start the market.
With a convenient location and low entry threshold, Novo Land should be sought after by young people, users and investors, said Midland’s Po.
The proportion of buyers born after the 1990s could reach 70 per cent, while about 30 per cent of the flats will be bought by investors, he said, adding that the rent per square foot will be around HK$40, representing a rental return of about 4 per cent.
The Hong Kong Monetary Authority’s next rate decision is due on June 13, in lockstep with the US Federal Reserve. Although no change is expected at that meeting, more traders expect the Fed to cut rates twice in the remaining months of 2024, according to CME Group.
The Hong Kong property market has an excess of completed and unfinished unsold units, although the stock declined by 3.6 per cent in May to 21,102, compared with the end of last year, according to Midland. Analysts expect developers to continue with their sales strategy of offering flats at discounts to pare the supply.
