New Hong Kong apartment prices have been slashed by the largest property developer in Hong Kong. Sun Hung Kai slashed prices on apartments in the Cullinan West II project by a whopping 10 percent. This comes in the wake of tough times in the property markets, with demand for new homes experiencing a low. It’s not the first time the firm is doing this. A few weeks ago, it announced another price cut for a different homes project.
The giant property developer is now giving away 119 homes at the Cullinan West II project for the average price of HK$23,893 or USD$3,044 each square foot. The price is 10 percent lower and is aimed at attracting more buyers.
Analysts predict that other firms will follow suit. Interest rates have risen, making the market duller than it was before. Other factors that are causing a lull in the property development front include the trade tug of war between China and the US, the state of the stock market, and the steps the Hong Kong government has taken to curb the rising prices.
Speaking about the recent developments in the industry, Derek Chan from Ricarcorp properties echoed the thoughts of many developers in the country. He said that given the uncertainty of the market’s future and the prevailing government policies, developers are looking to dispose of homes quickly. He hinted that the future looked unpromising for these companies, and they were worried they would be unable to beat time in selling off the homes.
In the last six months, property developers in Hong Kong enjoyed a boom in the industry. There was a huge demand for new units, plus the purchasing power of the people was at an all-time high. Most new homes fetched better prices, and the companies were able to price the units in each new project at a higher amount. But that seems to have changed now, and the developers and bracing up for tough times ahead.
Statistics show markets that have slowed down significantly. Only 1, 740 new homes were sold in July, representing a 15 percent fall from the number of units sold in June. This is according to statistics from Ricacorp, a major property Agency. Surprisingly, lived-in homes were the most sold, with 4, 040 contracts being sealed in July. It was still less than what was sold in the previous month, though, representing a 7 percent drop from those sold in June.
Home prices have fallen, too, as market volatility continues to bite. UBS predicts that prices will continue to plummet up to the end of next year, 2019, while, Citi bank gives a forecast of 7 percent price drop towards the end of this year. Should the trend continue, home buyers will find a respite. Those looking for a Hong Kong apartment for rent stand to benefit, too, if the prices of homes continue to fall.
The situation of the property markets has prompted the government to chip in with the aim to improve the look of things. Very soon, vacant units will be taxed. In the proposed law, developers will have to pay for the homes that remain unsold, a measure that’s expected to make the developers want to sell their homes fast by lowering prices. This will, in turn, lead to higher demand for new homes and restore the stability of the market.
Sun Hung Kai is already cutting their new Hong Kong apartment prices in what is being seen as a bid to woo buyers. Toward the end of the month of July, they announced a price reduction for 108 new units at their Park Yoho Milano project. Later, they announced another price reduction for their units at the Cullinan West II project.