Hong Kong developers keep pricing flats to move amid supply glut, high rates
- New price lists from New World Development, Far East Consortium and Early Light International undercut recent nearby sales by up to a third
Hong Kong developers continue to rely on attractive pricing as a strategy to clear their swollen stock as interest-rate cuts and a stronger economic recovery fail to materialise, according to analysts and the latest price lists for sales that are soon to launch.
New price lists for New World Development (NWD) and Far East Consortium’s Pavilia Forest III project in Kai Tak and Early Light International Holdings’ The Uppland in Tuen Mun both have average prices per square foot well below recent launches in nearby developments – by more than a third for Pavilia Forest III and 10 per cent for The Uppland.
“It’s definitely a buyers’ market now,” said Martin Wong, senior director and head of research and consultancy for Greater China at Knight Frank. “Currently, price cuts are the most effective way to drive sales, as buyers have many options.”
The supply of new flats in Hong Kong is expected to hit 112,000 in the next three to four years, according to a Housing Bureau estimate in March – marking the second straight quarter where the number hit a record high. Demand, meanwhile, is being smothered under interest rates that remain at a 23 year high and an economy that slowed to 2.7 per cent growth in the first three months of the year from 4.3 per cent in the preceding quarter.
NWD and Far East Consortium announced over the weekend that they will sell the cheapest 72 units in Tower 1 of Pavilia Forest III in Kai Tak at a discounted price of HK$16,438 (US$2,105) per square foot. That means the average price of the units in the tower, called Azure Forest, undercuts by more than a third the April 2022 average price of HK$24,833 per square foot for the first units at the nearby Monaco Marine project.
The 72 listed units – 30 one-bedroom units, 35 two-bedroom flats and seven three-bedrooms units – range from 260 to 666 sq ft, and the price range spans from HK$4.27 million to HK$13.89 million after discounts.
Azure Forest offers 264 units overall and will be the first tower in the Kai Tak residential area with a sea view, according to the developers.
