Evergrande's Emerald Bay flats flop in their third weekend sale in three months as homebuyers ignore developer's discount

By Martin Choi martin.choi@scmp.com

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May 12, 2020 12:06 PM SGT

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China Evergrande's weekend sale of its Emerald Bay flats in Tuen Mun has flopped for the third time in as many months, as Hong Kong's homebuyers shunned its meagre discounts in anticipation of further price declines.

The developer managed to find buyers for 41 flats, or 12 per cent of the 335 units on offer at 8:30pm, according to sales agents.

In March, the developer sold 49 of 141 flats when it launched the project in the midst of the city's coronavirus outbreak, at a time when social gatherings " including the viewing of real estate " was curtailed. Last month, Evergrande sold only 6.7 per cent of the second batch of Emerald Bay flats. Since then, Hong Kong's outbreak came under control, with no new infections recorded for the 13th time in the past 20 days.

"The developer has launched many rounds of this project previously, so it is no longer as fresh to homebuyers compared to the launch of a new project," said Sammy Po Siu-ming, chief executive of the residential division at Midland Realty, adding that Emerald Bay is selling in line with expectations.

Evergrande's launch is the biggest weekend offer of apartments by a single developer since business and social life was put on hold in Hong Kong in mid-January, as the local government tried to contain the coronavirus outbreak. As of Saturday, the disease had sickened 1,044 people in the city and claimed four lives. Locally transmitted cases, a measure of whether the disease is under control, have not been reported for 20 consecutive days.

Hong Kong's home prices may decline by between 10 per cent and 20 per cent this year amid the slumping economy and expected glut of projects, according to property consultants. Greater job insecurity will decrease desire among prospective homebuyers, they said.

Aerial view of Emerald Bay in Tuen Mun on October 25, 2019. Photo: Winson Wong alt=Aerial view of Emerald Bay in Tuen Mun on October 25, 2019. Photo: Winson Wong

The latest batch of Emerald Bay consists of 165 newly released flats in Phase Two, with sizes from 222 to 461 square feet (42.8 square metres), for between HK$3.57 million and HK$6.06 million (US$780,230), or HK$13,900 to 18,600 per square foot after a 14 per cent discount.

Evergrande's project, comprising 1,960 flats and 22 villas, also faces competition across the road, where Wing Tai Properties just launched 108 units this week of its OMA by the Sea project. The rival developer is selling its project cheaper, at an average price of HK$12,548 per square foot after a discount of up to 13.5 per cent.

Evergrande kept the discount rate unchanged from the previous phase. The rest of the 170 flats were those that remained unsold in previous sales of the Phase Two development.

The contrast could not have been more stark in October, when Evergrande's first real estate project in Hong Kong got off with a flying start, selling all 167 apartments on offer in a day. Buyers were then drawn by the starting price of HK$3.18 million for a 223 sq ft flat after discounts, or HK$14,260 per square foot, with the developer throwing in sweeteners, such as flexible financing plans, stamp duty discounts and furnishing.

"As the situation gradually improves, more prospective buyers have started coming out to purchase homes and are taking less of a wait-and-see approach, compared to the previous two months," said Midland's Po.

That is a shot in the arm for developers, as they start to put more projects on the market. Road King Infrastructure on Saturday offered 35 units at Crescent Green in Yuen Long, ranging from 300 to 501 sq ft each at an average price of HK$15,248 per square foot, for sale, on a first come, first served basis.

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 © 2020 South China Morning Post Publishers Ltd. All rights reserved.

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