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‘No price war’: Hong Kong developers brush aside fears of a property crash even as CK Asset offers new Kowloon flats at 15 per cent discount
- CK Asset’s executive director said discounts were ‘money from [the company’s] pocket’, dismissing fears they would lead to a price war among developers
- Clearing inventory is wise in a high-interest environment, and other developers are unlikely to follow suit on prices, analysts say
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CK Asset Holding’s aggressive pricing of homes at a development in Kowloon – where prices lower than Hong Kong has seen in seven years have drawn a throng of potential buyers – is not the first shot in a catastrophic price war but simply a smart strategy to clear inventory, experts said.
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The developer, the property flagship of Hong Kong billionaire Li Ka-shing, also dismissed claims that its discounted pricing aimed to, or would, trigger a price war.
More than 22,000 prospective buyers have deposited cheques in hopes of buying flats at Coast Line II in Yau Tong, which are priced at HK$14,686 (US$1,880) per square foot on average after discounts. CK Asset expanded the sale, which starts on Saturday, from 254 units to 382 and finally to all 626 available flats given the response.
“Every developer has different strategies to sell their new residential projects, and CK Asset just chose to quickly sell [these units] by offering some discounts, ” said Stewart Leung Chi-kin, chairman of the executive committee of the Real Estate Developers Association of Hong Kong.
The move should not be seen as a dire omen for the market, as the developer is still earning a healthy profit, Leung said. “If a developer decides to sell a property at a reduced price, but they are making a loss, then there would be a need to panic.”
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