Hong Kong's primary residential market sees wave of launches
The sell-outs signal primary-market demand is responding to developer incentives, potentially accelerating inventory turnover while pressuring secondary sellers amid interest-rate uncertainty.
Hong Kong developers sold out more than 360 primary-market flats across two projects on Oct 17, with further launches offering discounted prices and flexible terms.
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Hong Kong homebuyers are poised to see new residential launches in the coming days and weeks following a sell-out weekend of more than 360 flats in two major projects in the city.
Sun Hung Kai Properties (SHKP), one of Hong Kong’s major developers and landlords, was set to hold a second round of sales for Sierra Sea Phase 2C(2) in Shap Sze Heung, which is between Sai Kung and Ma On Shan, with 152 flats on offer as at Oct 14, it said in a statement.
Among them, 128 flats would be sold via a regular price list and the remaining 24 flats would be offered for sale via tender.
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The new batch would include flats with layouts of two bedrooms and three bedrooms and saleable areas of 418 to 679 sq ft. The flats to be offered via a price list would be sold at discounted rates starting from HK$12,714 ($2,070) psf, or a per-flat price of about HK$5.47 million to about HK$9.87 million.
The latest round of sales comes after SHKP sold all 142 flats on offer in the same project on Oct 17. These flats also had sizes ranging from 418 to 679 sq ft with discounted prices from HK$5.38 million.
Yuexiu Property also sold out on the same day all the 220 flats it put on offer via a price list at The Atlas Phase 1 project in Yau Tong. The flats comprised layouts with one to two bedrooms measuring 285 to 510 sq ft.
Yuexiu announced that 132 flats would be on offer via regular sale on Oct 24. The flats would range in sizes of between 278 and 497 sq ft. The discounted psf-price would start at HK$13,038 to HK$16,769.
“Primary launches continue to clearly outperform the secondary market,” said Derek Chan Hoi-chiu, head of research at Ricacorp Properties. “Developers maintain the upper hand by offering aggressive price cuts, flexible payment schemes and attractive rebates to drive swift inventory turnover.”
CK Asset Holdings, the flagship property developer of billionaire Li Ka-shing and family, is also set to commence the soft marketing for its Montage residential development in Kam Tin North.
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The development provides 327 homes, including multi-storey layouts with one to two bedrooms as well as houses with two to four bedrooms.
The anticipated flurry of sales comes after the US Federal Reserve raised its benchmark rate in September while major Hong Kong banks have so far held rates steady. The market generally expected the Fed to hold rates in October, but another increase is possible by the end of the year.
The Hong Kong Monetary Authority moves in lockstep with the Fed to keep the local currency’s peg to the US dollar. Higher interest rates could lead to higher mortgage payments by those seeking loans to buy property.
“Given the expectation of an interest rate hike, developers are likely to adopt a distinctly ‘volume-led, price-capped’ pricing strategy to maintain a healthy leverage position,” said Norry Lee, senior director of projects strategy and consultancy at JLL in Hong Kong.
Beyond the residential segment, Hong Kong’s office property received a boost with Swire Properties and Chinachem Group announcing plans to redevelop Sea View Building and Hoi Wan Building, together with the adjoining Chinachem Exchange Square, into a premium Grade A harbourfront office tower in Taikoo Place.
The combined site spans around 35,000 sq ft, enabling a larger, integrated commercial development. The project is expected to deliver about 500,000 sq ft of gross floor area, comprising a 27-storey office tower, a retail podium and basement car parking facilities. The new development is expected to break ground in 2027.
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The planned office tower forms part of Swire Properties’ ongoing expansion of Taikoo Place under its HK$100 billion investment plan, while also advancing Chinachem Group’s commitment to enhance and optimise its portfolio over the long term.
The redevelopment is taking place amid a gradual recovery in the city’s office property sector.
Hong Kong’s overall prime office market saw its vacancy rate drop to 12.5% in August from 13.5% a year earlier, according to Morgan Stanley. Central led the recovery, with rents rising 7.3% as vacancy declined to 7.8% from 11.2%.