Hong Kong developers to flood market with more than 9,000 homes in second quarter amid improving sentiment

By Pearl Liu pearl.liu@scmp.com / https://www.scmp.com/property/hong-kong-china/article/3004547/hong-kong-developers-flood-market-more-9000-homes-second?utm_medium=partner&utm_campaign=contentexchange&utm_source=EdgeProp | April 5, 2019 10:25 AM SGT
Hong Kong developers are likely to flood the market with more than 9,000 homes " nearly half the government's annual target " as they look to cash in on the rising prices. But analysts say increases could be dampened as builders woo buyers with hefty discounts.
Derek Chan, head of research at Ricacorp Properties, said that he expects developers to speed up their sales plans to take advantage of the recovering appetite. "However, to win over buyers amid the likely fierce competition, developers will not tag their homes at a much higher price."
Chan predicted that after a rapid pick up of home prices in the first quarter of about 4 per cent, the pace would slow to 3 per cent in the second quarter as supplies increased.
Hong Kong's home prices rose 1.6 per cent in the first two months of the year after having dropped by 9.2 per cent from August to December, according to data from the city's Rating and Valuation Department.
A straw poll conducted by the Post between March 22 and 25 showed that more than half of market observers believed the correction in home prices was over.
According to CGS-CIMB Securities, developers have obtained presale approval from the government for more than 6,000 units.
Among them are 1,172 units at Sun Hung Kai Properties' Cullinan West III atop Nam Cheong MTR station in Kowloon, 1,408 units at Billion Development's Centra Horizon in Tai Po, and some 2,000 units at China Evergrande's unnamed debut project in Tuen Mun.
Jeffrey Mak, a property analyst at CGS-CIMB Securities, said that some big developers held off their launch plans in the first quarter, waiting for sentiment to improve.
"Now is the best time," he said.
Long queues have since returned to sales offices.
On March 23, over 80 per cent of the 607 units in four projects were sold in the biggest weekend launch of the year. Among them was New World Development's Artisan Garden project in To Kwa Wan, which drew 3,700 bids for 294 units.
Henderson Land's The Consonance in North Point, meanwhile, has received more than 400 subscriptions for 72 units that go on sale on Thursday.
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