Wheelock's Ocean Marini flat sales run out of steam in second round as Hong Kong buyers stay home amid spiking coronavirus cases

By Martin Choi

/ SCMP |

March 23, 2020 11:34 AM SGT

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(Mar 21): Wheelock Properties' second batch of flat sales in Hong Kong's Tseung Kwan O district ran into the city's biggest daily increase in confirmed coronavirus infections, a deterioration that kept an estimated 20 per cent of registered buyers at home.

The developer sold 82 flats, or 80 per cent, of the 102 units on offer at its Ocean Marini project as of 9pm, according to sales agents, failing to repeat last weekend's sell-out launch. Separately, two flats each at the Marini and Grand Marini projects by the same developer in the same neighbourhood found owners.

Nearly 2,300 people put down cheque deposits to register their interest to purchase, which means 22 potential buyers for every available flat, agents said. However, an estimated 20 per cent of the registrants stayed away, after the city reported 48 new cases of coronavirus on March 20, in its biggest daily increase.

"There has been less of a turnout as the pandemic worsened over the past week," said Louis Chan Wing-kit, Asia-Pacific vice-chairman of the residential division at Centaline Property Agency. "The volatility of the US stock market has also had an impact on buyer sentiment."

Potential buyers for the 102 flats in the second batch of Wheelock Properties’ Ocean Marini project in Lohas Park, Tseung Kwan O, on March 21. Photo: Dickson Lee/SCMP

Wheelock had better luck last weekend, when buyers turned up in droves to snap up Hong Kong's first residential property launch in two months, helped by generous discounts.

The flats on sale this weekend were mostly two and three-bedroom units from 472 square feet to 1,061 sq ft (98 square metres), priced between HK$6.8 million and up to HK$17 million (US$2.2 million). On a per square foot basis, this weekend's sale averaged HK$15,679 after discounts, 1 per cent cheaper than Wheelock's project in the same vicinity launched last August.

The shaky sentiment shows how Hong Kong's property market is still struggling to find a footing, amid a combination of the ongoing coronavirus pandemic, and a global stock market rout that are pushing the city's economy into its first recession in a decade. Hong Kong's economy is projected to shrink 7.5 per cent in the second quarter, putting it on track for a 4.8 per cent decline this year, according to Standard Chartered Global Research.

The last new property launch in Hong Kong was Henderson Land Development's The Richmond in the Mid-Levels on Hong Kong Island, launched on January 21 just before the start of the Lunar New Year holiday, and before the coronavirus outbreak in central China took a turn for the worse. Buyers snapped up all of the 45 flats on offer in two sale sessions, showing a strong demand for smaller new project in the swanky neighbourhood. The flats ranged from 206 to 300 sq ft and were priced between HK$6.3 million and HK$9.7 million.

The market has gone into hibernation since, as developers and sales agents alike refrained from putting on sales launches amid the worsening outbreak, which kept many people at home away from crowded public places. Hundreds of real property agents quit, or converted into non-salaried salespeople to survive the long haul, as the drought in transactions dents their take-home pay.

Hong Kong's de facto central bank cut its base lending rate to a near record low on Monday, following the second emergency cut in as many weeks by the US Federal Reserve to bolster the American economy from a looming recession, as the global coronavirus pandemic showed no sign of slowing.

The city's retail sales and overall consumption are in the doldrums as job prospects appear dismal in an economy squeezed by more than a year of the US-China trade war, many months of anti-government protests and now, the coronavirus pandemic. Four people have died from Covid-19, with more than 250 people catching the virus as of Saturday afternoon.

Midland Realty, one of the largest property agencies in Hong Kong, partnered with mReferral Mortgage Brokerage Services to provide mortgage packages that cover up to 80 per cent of the overall payment for houses that are worth HK$8.3 million or less.

Wheelock's sales haul this weekend, at 80 per cent, came exactly within the expectations of sales agents, who pointed out that there was still ample supply of apartments in the neighbourhood.

Homebuyers are mostly interested in smaller flats for their own use, as the low interest rate environment in Hong Kong has made housing more affordable, agents said.

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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