Hong Kong’s New World, Far East slash prices at Pavilia Forest I flats to 8-year low

New World Development and Far East Consortium have cut the prices of their joint project in the Kai Tak district to the lowest in nearly eight years, as Hong Kong’s developers dig deep to rely on discounts to attract buyers amid a housing market slump.

The first 60 flats of the Pavilia Forest I project are being offered for as little as HK$16,008 (US$2,050) per square foot, with discounts of up to 18 per cent from the prices of new launches in the same neighbourhood, according to Midland Realty. The first flats on offer, ranging between 234 and 512 sq ft (47.6 square metres), are priced from HK$3.86 million to HK$9.87 million.

The project’s pricing is “aggressive” because “the discount on the first batch of units is a new low in eight years in the Kai Tak area, and a discount of nearly 30 per cent compared to the price of leftover units in the same area,” said Sammy Po, the chief executive of Midland’s residential division.

Pavilia Forest I comprises 291 apartments in two residential towers. There are 28 one-bedroom flats in the project, 205 two-bedroom units and 46 three-bedroom apartments. The remaining 12 homes are larger, more expensive “special units” that come with balconies and rooftop space, the developer said.

An aerial view of the Kai Tak Youth Sports Ground in Kowloon on 9 June 2024. Photo: Eugene Lee.

Hong Kong’s recent property launches have been discounted by as much as 10 per cent, compared with similar projects in 2015, according to data tracked by JLL.

The average price of a new class A unit in Yau Ma Tei on the Kowloon peninsula, defined as a flat smaller than 431 sq ft, was launched in May at HK$20,346 per square foot, 10.6 per cent less than 2015. The average price in Kennedy Town on the western fringe of Hong Kong Island has fallen by 6 per cent to HK22,022, from HK$23,424 per square foot in 2015.

“It makes sense for some developers to price their flats for sale at 2015 levels since secondary prices have [returned] to the late-2016 level,” said Will Chu, senior research analyst for Hong Kong and China property at CGS International Securities. “In an uptrend, developers priced their flats at a premium to the prevailing secondary prices. That was why in 2015, developers priced their flats at a premium to secondary prices in 2015 – quite close to 2016 secondary prices in hindsight.”

The pricing of Pavilia Forest I, announced on Thursday,, came hot on the heels of the announcement of official data that showed a 30 per cent slump in property transactions in June, the second straight month of declines after the knee-jerk bounce of March and April when the market briefly picked up in response to the scrapping of a stamp duty tax.

Transactions of residential units fell 30.5 per cent in June from a month earlier to 3,856 deals, while the total sales value shrank by 35 per cent to HK$34.5 billion, according to data released by the Land Registry on Wednesday. Residential property deals fell 35 per cent in May from April.

Overall property transactions – including shops, car parks, industrial spaces and office units in addition to homes – dropped 28.7 per cent in June from a month earlier to 5,245 units, with total value sliding 34 per cent to about HK$42 billion. Overall sales volume contracted by 25 per cent in May.

Property deals may shrink by another 20 per cent in the second half, compared to the first six months of the year because interest rates are stuck unchanged at a 23-year high, according to Ricacorp Properties. Home prices are also tipped to slip by another 3 per cent.



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