Hong Kong developer Chinachem's Sol City project met with weak demand despite discounted prices

By Daniel Ren and Sandy Li ren.wei@scmp.com / https://www.scmp.com/business/companies/article/3003393/hong-kong-developer-chinachems-sol-city-project-met-weak-demand?utm_medium=partner&utm_campaign=contentexchange&utm_source=EdgeProp | April 1, 2019 6:37 PM SGT
Home sales at Hong Kong property developer Chinachem Group's Sol City development in Yuen Long got off to a slow start on Tuesday, and only a fifth of the 148 units on offer were sold. The lacklustre sales, which started at 6pm local time, added to evidence that a correction in Hong Kong's property market is far from over.
Twenty-nine apartments were sold, with most buyers seeking one-bedroom units, said Sammy Po Siu-ming, the chief executive of Midland Realty's residential division, the project's sales agent.
"Quite a big number of people showed up, but many of them were interested only in small units," said Po. "The number of sales was not big, but it was not a surprise either."
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Chinachem is offering the units at an average price of HK$15,876 (US$2,022) per square foot after a discount. The apartments, which vary in size from 319 sq ft to 754 sq ft, are priced at HK$5.64 million to HK$12.9 million (US$718,571 to US$1.6 million). The one-bedroom apartments, priced at about HK$5 million (US$637,031), sold fast, said Po.
Most buyers who showed up on Tuesday for the sale of apartments at Sol City were seeking one-bedroom units, according to the sales agent. Photo: Edward Wong
Also on Tuesday, a price list was released for 50 units at The Consonance, a project privately owned by Henderson Land Development chairman Lee Shau-kee. The apartments are priced at an average of HK$25,951 (US$3,306) per square foot, after factoring in a discount of as much as 6 per cent.
The property comprises 216 units ranging in size from 175 sq ft to 302 sq ft, and will be completed in August 2020. The cheapest apartment is a 196 sq ft unit on the fifth floor and costs HK$4.98 million (US$634,482, or HK$25,409 (US$3,237) per square foot, after discount.
According to Centaline, lived-in apartments in the area go for HK$20,888 (US$2,661) to HK$27,977 (US$3,564) per square foot.
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Hong Kong developers have been reducing prices to woo homebuyers amid an acceleration in launches of new flats on the market. Four projects with 607 units were offered for sale in Lohas Park, To Kwa Wan, Yau Tong and West Kowloon last weekend, the biggest weekend launch in a year.
Home prices in Hong Kong, the world's most expensive housing market, plunged by 9.2 per cent between a peak in July last year and December, according to the city's Rating and Valuation Department.
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In January, prices remained nearly unchanged, inching up by 0.08 per cent, as expectations of higher mortgage rates, a cooling Chinese economy and uncertainties around the US-China trade war kept homebuyers away.
Prices rose by another 2.1 per cent between February and March 10, according to the Centa-City Leading Index, which is compiled by Centaline. Investment banks Nomura and CLSA expect home prices to rise by 15 per cent this year, although a forecast by DBS sees prices dropping 10 per cent.
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.
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